UC-NRLF 


B    3    ISfi    lib 


: 

i 

■Wj 

■    '                                     ^ 

jKM; 

■  ' 

HK- 

^> 

\ 

. 

Hh 

■ 

j'  ■  <  ) 
\         < 

s 

I- 

I 

; 
'  ■ 

i 

i 

1 

Digitized  by  the  Internet  Archive 

in  2008  with  funding  from 

Microsoft  Corporation 


http://www.archive.org/details/americanbankerscOOwhitrich 


The  PhiladelphiaNational  Bank 


PHILADELPHIA 


ORGAXIZKn    1803 


Original  Building 

Capital, 

$1,500,000 

Surplus  and 
Profits, 

$3,500,000 

Deposits, 

$43,000,000 

Resources, 

$50,000,000 

Dividends  paid 
to  shareholders, 

$14,914,372 


IN  1803,  when  Philadelphia  was  the  capi- 
tal of  the  nation,  as  well  as  its  metropolis, 
its  expanding  trade  required  additional 
banlcing  facilities.  At  a  meeting  of  its  promi- 
nent citizens,  in  response  to  this  demand,  THE 
PHILADELPHIA  BAN^  was  organized. 
It  at  once  took  a  foremost  place  among  the 
financial  institutions  of  the  country,  and  has  al- 
ways occupied  this  enviable  position. 

Its  directorate  has 
ever  been  selected 
from  Philadelphia's 
best  citizens  and  to- 
day comprises  men 
prominent  not  only 
in  civic  life  but  nat- 
ional affairs. 

The  c  o  ni  m  a  n  d 
that  the  Bank  has 
upon  the  public  con- 
fidence is  evinced  by 
the  fact  that  it  has 
the  largest  line  of  in- 
dividual deposits  of 
any  bank  in  the  State 
of  Pennsylvania. 


/ 

■  '- 

m 

J 

,   MB 

mm 

X 

^    ?1 


mi 


Present  Home 


OFFICERS 

LEVI  L.  RUE, 
LINCOLN  GODFREY, 
HARRY  J.  KESER,       . 
HORACE  FORTESCUE, 
DAVID  S.  LUDLUM, 


President 

Vice-President 

.   Cashier 

Asst.  Cashier 

Asst.  Cashier 


N.  PARKER  SL'ORTRIDGE, 
Chairman  of  the  Hoard 


!  i  \ 


i.il  1  'BSS.pi 


s? ' 


.'  ^  .  r  '\ 


Erected  a.d.  1837,  jointly  by  The  Philadelphia 
Bank  and  The  Bank  of  the  United  States 


E.^^ 


I  ^ 


(TT-T 


The  Seaboard  National  Bank 

of  the  City  of    New  York 

I  8   Broadway 


SEABOAflD 
0RG.?^CCCLX;OXJJ] 


Capital,    $1,000,000 
Surplus  and  Profits  ('earned)   $1,650,000 

Especially  equipped  for  handling 
out-of-town  accounts 


S.  G.  NELSON 

W.  K.  CLEVERLEY 

L.  N.  DeVAUSNEY 


S.  G.  BAYNE,  President 
-      Vice-President        C.  C.  THOMPSON 
Assistant  Cashier         J.  C.  EMERY 
Assistant  Cashier         O.   M.  JEFFERDS 

We  invite  correspondence 


Cashier 
Assistant  Cashier 
Assistant  Cashier 


t/i 


THE 

CONTINENTAL 

NATIONAL 

BANK 

OF 
CHICAGO 


WE  invite  Banks  and  Bankers, 
Manufacturers,  Merchants  and 
Individuals  to  open  accounts  with  us  and 
avail  themselves  of  our  superior  facilities. 


CAPITAL  AND  SURPLUS 
DEPOSITS      -       -       - 


$7,000,000.00 
$70,000,000.00 


OFFICERS 


GEORGE  M.  REYNOLDS 
ALEX.  ROBERTSON 
WM.  G.   SCHKDEDEK       - 
Br  NJ    S.   MAYER 
HERMAN  WALDECK      - 
F.  H     ELMORE 
WILBER  HATTERY 
J.  R.  WASHBURN      - 


President 
Vice-President 
Cashier 
Assistant  Cashier 
Assistant  Cashier 
Assistant  Casliier 
Assistant  Cashier 
Assistant,  Cashier 


DIRECTORS 


JOHN  C.  BLACK,  Chairman  of  the  Board. 

J.  OGDEN  ARMOUR,   President,  Armour  &  Co. 

ALBERT  J.   EARLING,    President,    Chicago,    Milwaukee   &  St. 

Paul  Rv.  Co. 
HENRY   BOTSFORD,  Packer 

B.  A.    ECKHART,    President,  Eckhart  &  Swan  Milling  Co. 
WM.  C.   SEIPP,  Capitalist 

EDWARD   HINES,   Piesident,  Edward  Hines  Lumber  Co. 
FRANK   HIBBARD,  Hibbard,  Spencer,  Bartlett  &  Co.,  Wholesale 

Hardware 
F.  E.  WEYERHAEUSER,  Lumberman  and  Pine  Land  Owner,  St. 

Paul,  Minn. 
S.AMUEL  McROBERTS,  Treasurer,  Armour  &  Co. 
ALEX.  ROBERTSON,  Vice-President 
GEORGE  M.  REYNOLDS.   President 


ti 


/^ 


Brown  Brothers  &  Co. 

New  York  Philadelphia  Boston 


Alexander  Brown  CB^  Sons 

Baltimore 


Issue  Travelers'  and  Commercial 
Letters  of  Credit  and  Transact 
a  General  Banking  Business 

Investment  Securities 
Bought     and    Sold 


Brow^n,  Shipley  &  Company 


London 


THE  AMERICAN   BANKERS  CONVENTION  YEAR  BOOK^ 


CONTAINING   THE 


BANKING  SYSTEMS 

OF  THE  WORLD 

By  Maurice  L.  Muhleman 


A  REVIEW  OF  THE  BANKING  SYSTEMS,  THEIR  METHODS  OF 
ISSUING    NOTES,    AND   SAFEGUARDS    PROVIDED    THERE- 
FOR; INCLUDING  AN  ACCOUNT  OF  THE  FORMER  CEN- 
TRAL BANKING  SYSTEM  IN  THE  UNITED  STATES 


ILLUSTRATED  WITH  EXTERIOR  AND  INTERIOR  VIEWS 
OF     THE      GREAT     BANKING     AND      FINANCIAL 
INSTITUTIONS   OF    THE    OLD    WORLD    RE- 
PRODUCED   FROM    ORIGINAL 
PHOTOGRAPHS 


designed  and  arranged  by 
Alfred   F.  White 

PUBLISHED    ON     THE    OCCASION    OF    THE    THIRTY-FOURTH 

ANNUAL  CONVENTION  OF  THE  AMERICAN  BANKERS 

ASSOCIATION     AT     DENVER,     COLORADO, 

SEPTEMBER  28  TO  OCTOBER  2,  1908 


\^ 


liityS'.Kv- 


ti 


published  bv 


THE  BANKING  LAW  JOURNAL 

27  Thames  Street,  New  York 


OF  THE 

^UN1VERSITY| 

OF 


J^- 


Copyright  igoS,  by  Alfred  F.  White 


VA^    XN'H 


FOUNDED 
1803 


1^ 


Ww 


has  for  over  one  hundred  years  given  par- 
ticular attention  to  commercial  and  bank 
accounts,  and  still  desires  to  extend  to 
Mercantile  and  Banking  Institutions  every 
facility  in  domestic  and  foreign  banking. 

Resources  thirty  millions  of  dollars. 


3 


5M.  ms^  ..f 


^ 


Cleiu'ral  Baiikiiis  Room 


Inite^  States  Mortgage  ^  Cnt3t  Compang 

New  York 

Capital  and  Surplus,  $6,000,000.00 


A  CTS   as  Correspondent  for  Banks,  Bankers  and  Trust  Companies. 
/\       Designated  Legal  Depositary  for  State,  City,  Court  and   Trust 
J-  -^     Funds.      Prepares  and  Certifies  to  issues  of  Municipal  and  Cor- 
porate Bonds  and  acts  as  Fiscal  Agent.  Foreign  Exchange  bought  and  sold. 


WILLIAM  B.  BOL'LTON 
DUMONT  CLARKE 
C.  A.  COFFIN 
HON.  GEORGE  A.  COX 
C.  C.  CUYLER 
CHARLES  D.  DICKEY 
WILLIAM  P.  DIXON 


DIRECTORS 

ROBERT  A.  GRANNISS 
CHARLES  M.  HAYS 
WILLIAM  A.  JAMISON 
GISTAV  E.  KISSEL 
L.  C.  KRAUTHOFF 
CLARENCE  H.  MACKAY 
ROBERT  OLYPHANT 


JOHN  W.  PATTEN 
MORTIMER  L.  SCHIFF 
VALENTINE  P.  SNYDER 
EBEN  B.  THOMAS 
JAMES  TIMPSON 
ARTHUR  TL'RNBULL 
CORNELIUS  VANDERBILT 


73d  St.  &  Broadway 


55  Cedar  Street 


l-25th  St.  &  8th  Avenue 


r^ 


174451 


BANKCRS  TRUST 

-»-  COMPANY 


7  Wall  Street,  New  York 


Capital.  $1,000,000 


Surplus  and  Profits,  $1,1  78,000 


Directors 


STEPHEN  BAKER.  President  Bank  of  the  Manhattan  Co..  New  York. 
SAMUEL  G.  BAYNE.  President  Seaboard   National  Bank.   New  York. 
EDWIN   M.   BULKLEY.  Spencer  Trask  &  Co.,  Bankers.  New  York. 
JAMES  G.  CANNON.  Vice-President    Fourth   National   Bank,   New  York. 
E.    C.    CONVERSE.    President.   New  York. 

HENRY   p.   DAVISON,  Vice-Presiden,   First    National   Bank.    New  York. 
WALTER  E.   FREW.  Vice-President  Corn  Exchange  Bank,   New  York. 
FRED  K    T.    HASKELL.  Vice-President  Illinois  Trust  &  Savings  Bank.  Chicago. 
A.    BARTON   HEPBURN.   President  Chase   National   Bank,    New  York. 
THOMAS   W.   LAMONT.   Vice-President.  New  York. 
EDGAR  L.   MARSTON.  Blair  &  Co.,  Bankers,   New  York. 
GATES  W.  McGARRAH,   President  Mechanics'  National  Bank,   New  York. 
GEO.  W.  PERKINS.  J.   P.   Morgan  &  Co.,  Bankers.   New  York. 
WILLIAM   H.    PORTER.   President   Chemical   National    Bar.k.    New  York. 
DANIEL  G.    REID.  Vice-President   Liberty   National   Bank,    New  York. 
EDWARD   F.   SWINNEY,    President    First   National   Bank,    Kansas  City. 
JOHN    F.    THOMPSON.  Vice-President.  New  York. 

GILBERT  G.   THORNE.  Vice-President   National    Park   Bank.   New  York. 
EDWARD  TOWNSEND.  President  Importers"  &  Traders'  Nat.  Bank.  New  York. 
ALBERT   H.  WIGGIN.  Vice-President  Chase   National   Bank.    New  York. 
SAMUEL  WOOLVERTON,  President  Gallatin  National  Bank.   New  York. 
EDWARD    F.    C.    YOUNG,    President    First    National    Bank,    Jersey  City. 

Particular  attention  is  called  to  the  personnel,  character  and  strength 
of  this  Company's  directorate.    Interest  paid  upon  inactive  deposits. 


E.C.CONVERSE,  President 
J.  F.  THOMPSON,  l^.  P.  T.W.LAMONT,      V.P. 

D.E.POMEROY,  Treas.  B.  STRONG  Jr.  Secy. 

H .  W.  D O N OVA  N ,  ASSt. Treas.     F.  N.  B. CLOSE, Asst.  Secy 


-4 


ip 


m 


ORIGINAL  CHARTER  1329. 


THE 

GALLATIN 

NATIONAL     BANK 

OF  THE  CITY  OF  NEW  YORK. 


CAPITAL,        ...         -  $1,000,000 

SURPLUS  AND  PROFITS  (Earned  )      2,400,000 

OFFICERS. 

SAMUEL  WOOLVERTON,  President. 
ALEXANDER  H.    STEVENS,  Vice-President. 
GEORGE  E.  LEWIS,  Cashier. 
HOWELL  T.  MANSON,  Assistant  Cashier 


DIRECTORS. 

ADRIAN  ISELIN,  JR.  CHARLES  A.  PEABODY. 

FREDERIC  W.  STEVENS.  SAMUEL  WOOLVERTON, 

ALEXANDER  H.  STEVENS.       CHARLES  H.  TWEED. 
W.  EMLEN  ROOSEVELT,  THOMAS  DENNY. 


CO 

h 
h 


o 

^ 

< 

u 

12 

O 

z 

< 

:z 

CQ 

;jl; 

:i: 

H 

V5 

O 


O 
< 

h 


J-i       <      Q 


Q 

Q 
Z 

D 
O 


< 

o 

C/3 


z 

PQ 


m 


GIKARD    NATIONAL    BANK 

Oldest  Bank  Building  in  the  United  States.     Erected  in  1795  for  the 

First  Bank  of  the  United  States 

For  over  three-quarters  of  a  century  the  GIRARD 
NATIONAL  BANK  of  Philadelphia  has  enjoyed 
the  confidence  of  the  business  community  of  Phila- 
delphia. Q  Its  long  successful  career  bears  evidence  ol 
conservatism  and  progressiveness  in  its  management 
and  its  name  stands  as  a  synonym  tor  strength,  safety 
and  solidity  throughout  the  entire  country.  Q  Its 
equipment  for  handling  bank  accounts  is  unsurpassed. 
Capital,  Two  Million  Dollars.  Q  Surplus  and  Profits; 
Three  Million  Eight  Hundred  Thousand  Dollars. 
Deposits,  Thirty-five  Million  Dollars. 

FRANCIS   B.  REEVES President 

RICHARD  L.  AUSTIN Vice-President 

THEO.  E.   WIEDERSHEIM  .    .    2d  Vice-President 

JOSEPH   WAYNE,  Jr Cashier 

CHAS.  M.  ASHTON -Isst.  Cashier 


lli 


Keystone  NafionaiiBank 
OF  Pittsburg 


PITTSBURG,  PA. 

CAPITAL  STOCKS  500.00  0 
SURPLUS  ^PROFITS  $900,0  0  0 


OFFICERS 

G.M.LAUCHLIH,PfiesiOEHT 

W.H.NI MICK, VICE  PMSIDENT 
A.S.BEYMER  ,  CAEMixR 

E. e.Mf  COY,  A«ST.  CASHIER 


For  over  twenty-four  years  the  KEYSTONE 
NATIONAL   BANK  of   PITTSBURG 

has  enjoyed  uniform  patronage  and  prosperity. 
SF  The  efficient  service  it  renders  its  chentele,  its 
policy  of  Hberahty  to  legitimate  enterprises,  com- 
bined with  conservatism  in  the  placing  of  its 
funds,  has  inspired  confidence,  not  alone  in  the 
immediate  vicinity,  but  throughout  the  banking 
and  financial  world. 


iSi 


^ 


THE  BANK  OF  COMMERCE, 

NATIONAL  ASSOCIATION 

OF  CIiE\T:i.A?J^D,  WAS  ORGAIVIZED  IN  1899. 
C.  HAVING  A  CAPITAL,  SURPLUS  AND  PROFITS 
OF  THREE  MILLION  FOUR  HUNDRED  THOU- 
SAND DOLLARS,  AND  RESOURCES  OF  EIGHT- 
EEN MILLION  DOLLARS,  IT  IS  THOROUGHLY 
EQUIPPED  FOR  TRANSACTING  ALL  BRANCH- 
ES OF  LEGITIMATE  BANKING,  AND  COR- 
DIALLY INVITES  CORRESPONDENCE  WITH 
OUT-OF-TOWN  BANKS,  TRUST  COMPANIES, 
CORPORATIONS  AND  FIRMS,  REQUIRING  A 
CLEVELAND  CONNECTION;  CONFIDENTLY 
BELIEVING  IT  CAN  RENDER  SERVICE  THAT 
WILL  MERIT  THEIR  PATRONAGE.  C  ITS  DI- 
RECTORATE IS  COMPOSED  OF  SOME  OF 
CLEVELAND'S  MOST  REPRESENTATIVE  BANK- 
ERS AND  BUSINESS  IVIEN;  AN  ASSURANCE  OF 
A  FAITHFUL   PERFOR^VIANCE    OF  ALL   TRUSTS. 


■UNIVERSITY 

\^  OF  ' 


Jf  our  tf)  ^  treet  i^ational 
panfe  of  ^i)ilatielpf)ia 

has  unsurpassed  facilities  for 
extending  every  form  of 
financial  service.  A  special- 
ty is  made  of  bank  accounts. 
Capital  and  surplus  over 
!^9, 000,000;  total  resources 
over  §50,000,000.  Cor- 
respondence mvited. 


R.  H.  RUSHTON,   President 

E.  F.  SHANBACKER,   1st  Vice-President 
B.  M.  FAIRES,  2nd  Vice-President 

R.  J.  CLARK,  Cashier 

W.  A.   BULKLEY,  Assistant  Cashier 

F.  G.  ROGERS,   Mgr.  Foreign  Ex.  Dept, 


'>^:^,-      '-  -I  ) '. 


^S 


MARINE  NATIONAL  BANK 

OF  BUFFALO 

Capital  -  -  $1,500,000.00 
Surplus  and  Profits,  1,145,926.80 
Deposits   -         -     17,521,984.80 


STEPHEN     M.  CLEMENT 
JOHN  J.  ALBRIGHT 
JOHN  H.  LASCELLES 
CLIFFORD  HUBBELL 
HENRY  J.  AUER 


President 

Mce-President 

Vice-President 

Cashier 

Assistant  Cashier 


STEPHEN  M.  CLEMEXI 
JOHN  J.  ALBRIGHT 
CHAS.  W.  GOODYEAR 
WM.  H.  GRATWICK. 
EDMUND  HAYES 
WM.  H.  HOTCHKISS 


Direrturs 

E.  H.  HUTCHINSON 
GEORGE  B.  MATHEWS 
CHARLES  H.  KEEP 
JOHN  H.  LASCELLES 
WM.  A.  ROGERS 
MOSES  TAYLOR 


CORNELIUS  YANDERBILT 


OLDEST    COMMERCIAL    BANK    IN     BUFFALO 


WE    HAVE    THE    FACILITIES    FOR    HANDLING   YOUR    BUSINESS 
WE    INVITE    CORRESPONDENCE    FROM    BANKS   AND    BANKERS 


^. 


iM   p 


M 


m 


it 


THE  NEW  HOME  OF  THE   PIKST  NATIONAL  l;ANk 

7Ae  FIRST  NATIONAL  BANK  of  CLEVELAND 

IS  the  largest  National  Bank  m  tke  State  of  OKio.  C.  It  kas  a 
Capital  of  $2,500,000  ;  Surplus  anJ  Profitsof  $1,100,000,  and 
Total  Resources  of  $31,000,000,  C,  I*  ^^^  ^  directorate  com- 
posed or  rorty-six  representative  business  men  and  oankers  who 
are  a  guarantee  of  fidelity,  and  its  steady  substantial  growtk 
indicates  a  successful  management.  CL  Tne  personal  attention 
or  an  orxicial  is  given  all  correspondence  of  a  business  nature. 


m 


THE  FIDELITY  TITLE  AND 
TRUST  COMPANY  OF  PITTS 
BURGH,  was  incorporated  in  1886. 
^  It  was  the  first  trust  company  in  Pittsburgh 
organized  under  the  general  Trust  Company 
Act  of  1 874.  ^  The  substantial  progress  it  has 
made  is  due  to  the  policy  it  has  pursued  in 
carefully  conserving  the  best  interests  of  its 
clientele.  ^  Having  a  board  of  directors  com- 
posed of  some  of  the  leading  bankers  and  busi- 
ness men  of  Pittsburgh,  a  capital  of  two 
million  dollars,  surplus  and  profits  over  five 
millions  and  total  assets  seventy-three  millions, 
its  facilities  for  transacting  a  banking  and  trust 
company  business  are  unsurpassed. 


John  B.  Jackson, 
James  J.  Donnell, 
John  McGill, 
J.  A.  Knox, 
Thomas  R.  Robinson, 


OFFICERS 

President      Robert  Pitcairn, 
Vice-President       C.  E.  Willock, 
Secretary      Eugene  Murray, 
Ass't  Sec'y-Treas.      A.  F.  Benkakt, 
.      Auditor       M.  McGiffin, 


Vice-President 

Treasurer 

Ass't  Sec'y-Treas. 

Asst.  Trust  Officers 


C.  S.  Gray,  Vice-President  and  Trust  Officer. 


m 


m 


CULOKAUO  .STAIE  CAPITOL  DENVER 


Denver,  the  Convention  City,  1908 


THE  thirty-fourth  annual  convention  of  the  American  Bankers 
Association  will  be  held  in  Denver,  the  week  beginning  Septem- 
ber 28,  1908.  The  marvelous  progress  of  the  banking  business 
in  the  West  during  the  past  ten  years  and  the  excellent  banking  facilities 
of  Denver,  make  it  the  most  appropriate  city  in  the  country  for  the  con- 
vention of  1908.  The  bankers  of  Denver  have  prepared  an  elaborate 
programme  for  the  entertainment  of  the  delegates  and  visitors. 

Denver  is  one  of  the  most  modern  cities  in  the  world.  It  is  situated 
in  the  "Land  of  Sunshine,"  one  mile  above  sea  level.  Government 
statistics  say  the  sun  shines  on  304  days  a  year  in  Denver.  Denver  is 
one  of  the  four  great  natural  distributing  points  of  America.  It  has  a 
population  of  about  225,000.  Its  buildings  are  built  ot  stone  and  brick 
and  are  modern  and  up-to-date.      It  has  two   hundred   miles  of  electric 


street  car  service,  unsurpassed  in  the  world.  Its  school  system  ranks 
highest  in  America,  and  it  is  the  most  beautiful  and  comfortable  residence 
city  in  the  world. 

Denver's  banking  facilities  are  unsurpassed  in  America.  It  has 
seven  national  banks,  wdth  an  aggregate  capital  of  $3,200,000  and  sur- 
plus $2,750,000,  and  fifteen  state  banks  and  trust  companies  with  an 
aggregate  capital  of  $2,750,000,  making  a  total  banking  capital  and  sur- 
plus of  nearly  $9,000,000,  and  deposits  approximating  $62,000,000. 

Colorado  is  the  greatest  mountain  resort  state  on  the  American 
continent.  Its  scenic  wonders  are  unequaled  in  the  world.  It  is  not 
only  the  greatest  mining  state  in  America,  but  its  agricultural  interests 
are  far  greater  than  its  mineral  resources.  In  1 907  its  mineral  production 
was  $48,780,745  while  its  farm  products,  including  sugar  beets,  was 
$95,891,187,  and  its  live  stock  products  were  $30,020,000.  It  also 
produced  in  refined  sugar  $20,000,000.  Colorado's  population  is  20/^ 
foreign  and  80%  native  American.  On  the  two  following  pages  will 
be  found  the  leading  financial  institutions  of  Denver,  the  First  National 
Bank  and  the  International  Trust  Company. 


UNITED  .STATES  MINT,  DENVER 


esaeaiias  . 


/.-;:- 4 


rc^xAaau'^urii^'-''^gga«a::i-B^.£yiftx-w^:a-'^^-j^^^ 


i^- 


FIRST 

NATIONAL 

BANK 


THE  FIRST  NATIONAL 
BANK  of  DENVER  is 
today  one  of  the  strongest 
banks  in  the  United  States.  Its 
extensive  list  of  correspondents 
throughovit  the  country  gives  it 
unrivaled  facilities  for  handling 
all  business  entrusted  to  it. 
Capital,  One  Million  Dollars 
Surplus,  One    Million   Dollars 


D.  H.  MOFFAT 
F.  G.  MOFFAT  . 


D.  H.  MOFFAT 
L.  H.  EICHOLTZ 
J.  A.  McCLURG 
THOMAS  KEELY 


Officers 

.  President  THOS.  KEELY  .  Yice-President 
.  .  Cashier  C.  S.  HAUGHWOUT,  Asst.Cashier 
J.  C.  HOUSTON,  Asst.  Cashier 

Directors 

F.  G.  MOFFAT 

C.  S.  HAUGHWOUT 

GERALD  HUGHES 

C.  M.  MacNEILL,  Colorado  Springs 


SPENCER   PENROSE,  Colorado  Springs 


I 


pyyg^'  "inr"  aniTVj 


THE  INTERNATIONAL  TRUST 
COMPANY  IN  DENVER,  is  the 
oldest  and  largest  Trust  company  in  the 
State  of  Colorado.  SF  The  substantial  pro- 
gress it  has  made  is  due  to  the  policy  it  has 
pursued  in  safeguarding  the  interests  of  its 
clientele.  SF  Its  directorate  consists  of  leading 
bankers  and  financial  men  of  the  west. 
SF  Every  department  is  under  the  manage- 
ment of  a  highly  specialized  officer  and  its 
facilities  for  transacting  a  banking  and  trust 
company  business  are  unsurpassed.  SF  Capital 
and  Surplus,  Five  hundred  thousand  dollars. 


D.  H.  MOFFAT 
THEO.  G.  SMITH 
S.  G.  GILL 
P.  E.   CLELAND 


President 

Vice-President 

Secretary 

Assistant  Secretary 


?Slf 


i^ 


The  Corn  Exchange 
National  Bank  of 
Philadelphia  has  the 

facilities  for  handling 
your  business.  Resources 
Eighteen  Million  dollars. 


BENJAMIN  GITHENS, 
WM.  W.   SUPPLEE. 
CHAS.   S.  CALWELL, 
M.   N.  WILLITS.   Tr.. 


President 

Vice-President 

Cashier 

Assistant  Cashier 


\N«r;4 


i^ 


f;:J 


^T^HE   UiXIOiX   NATIONAL 
BANK   OF   CLEVELAND 


i 


has  the  resources,  organiza- 
tion and  connections  which  enables  it 
to  be  of  the  utmost  service  to  Banks, 
Corporations,  Firms  and  Individuals, 
whose  business  it  desires,  and  to  whom 
is  extended  the  facilities  acquired 
through  twenty-hve  years  of  service 
to  the  business  communitv.  ^  Capital 
and  Surplus,  two  million,  five  hun- 
dred thousand  dollars;  Resources, 
fifteen  million  dollars. 


if 

1 


.  :i.'J»<.1BE»«£f 


^v. 


WMJMf 


BiSMiCfl^   iL,(o)iy]n© 


Officei^s 


JULIUS  S.    WALSH,     Chairman  of  the  Board. 


breckinrid(;e  tones, 

President. 

JOHN  D.  DAVIS, 

/-  'ice-President. 

SAMUEL  E.  HOFFxMAN, 

/  'ice-President. 

HENRY  SEMPLE  AMES, 

Assistant  Executive  Officer. 

FREDERICK  VIERLING, 

Tritst  Officer. 


TOM  W.  BENNETT, 

Real  Estate  Officer. 
GEO.  ICINGSLAND, 
Assistant  Real  Estate  Officer. 
JAMES  E.  BROCK, 
Secreta?y. 

HUGH   R.  LYLE. 
A  ssistant  Secretary. 
HENRY  C.  IBBOTSON, 
Assistant  Secretary. 


C.  HUNT  TURNER  Jr., 
A  ssista  nt  Sec  ret  a  ry. 
LOUIS  W.  FRICKE, 
Assistant  Secretary. 
WILLIAM  G.  LACKEY, 
Bond  Officer. 
WM.  McC.  MARTIN, 
Assistant  Bond  Officer. 
CHARLES   W.    MOKATH 
Safe  Deposit  Officer. 


Uirectors 


JOHN  I.   BEGGS, 

Preudetit  U?iileit  Railivays  Co.  of  St.  Louis. 

President  Laciede  Gus  Liglit  Co. 

WILBUR  F.  BOYLE, 

Boyle  &=  Priest. 

JAMES  E.  BROCK, 

Secretary. 

MURRAY  CARLETOX, 

Presidetit  Carlet07i  Dry  Goods  Co. 

CHARLES  CLARK, 

HORATIO  N.  DAVIS, 

President  Smith  <5^  Daz'is  ^Ifg.  Co. 

JOHN  D.  DAVIS, 

Vice-  President. 

AUGUSTE  B.  EWING, 

DAVID  R.  FRANCIS, 

Francis  Bro.  irr'  Co. 

AUGUST  GEHNER. 

President  German-A  merican  Bank. 

S.  E.  HOFFMAN, 

/  'ice-President. 

BRECKINRIDGE   JONES, 

President. 


W.   J.  McBRIDE, 

I'ice-Presidetit Haskell &-=  Barker  Car  Co. 

NELSON  W.  McLEOD, 

Vice-Pres.  Graysoii-McLcod Lnmber  Co. 

SAUNDERS  NORVELL, 

President  Norvell-Shapleigh  Hdiv.  Co. 

ROBERT  J.  O'REILLY,  M.  D. 

WM.  D.  ORTHWEIN, 

President  U'lii.  D.  Ottkivein  Grain  Co. 

HENRY  W.  PETERS, 

President  Peters  Shoe  Co. 

H.  CLAY  PIERCE, 

CJiairman  Board  Waters-Pierce  Oil  Co. 

JOSEPH  RAMSEY,  Jr., 

AUGUST  SCHLAFLY, 

Presidejit  Union  Trnst  &=  Savitigs  Bank. 

R.  H.  STOCKTON, 

President  Majestic  Mfg.  Co. 

JULIUS  S.  WALSH, 

Chairman  of  the  Board. 

ROLLA  WELLS, 

Mayor  of  City  of  Si.  Louis. 


m 


^1 


THE  COAL  CBi,  IRON  NATIONAL  BANK 

OF  THE  CITY  OF  NEW  YORK 

Is  located  directly  opposite  to  the  downtown  ferries  of  the 
Pennsylvania,  Lehigh  Valley,  Baltimore  ^  Ohio  and  the 
New  Jersey  Central  Railroads,  which  are  the  principal  ap- 
proaches to  the  downtown  commercial  district.  Out-of- 
town  bankers  find  it  very  convenient  to  deal  with  this  bank 
which  therefore  makes  a  specialty  of  serving  the  interests  of 
inland  institutions  whose  business  always  receives  personal 
attention.  The  Directors  and  Stockholders  of  this  bank  con- 
sist largely  of  men  prominent  in  the  great  railroad,  anthracite 
coal  and  manufacturing  industries  of  the  East,  in  addition  to  a 
large  representation  from  the  diversified  commercial  interests 
of  New  York  City.  It  has  a  large  official  staff  which  has  been 
identified  with  metropolitan  banking  and  commercial  interests 
for  many  years  and  is  thoroughly  equipped  to  handle  in  its 
various  departments  both  domestic  and  foreign  banking. 

Its  capital,  surplus  and  profits  aggregate  over  One  Million 
Two  Hundred  Thousand  Dollars.  Total  Resources  exceeding 
Six  Million  Five  Hundred  Thousand  Dollars. 

The  officers  are  Mr.  John  T.  Sproull,  President ;  Anthony 
A.  Lisman  and  David  Taylor,  Vice-Presidents;  Addison  H. 
Day,  Cashier,  and  Henry  J.  Dorgeloh,  Assistant  Cashier. 


T 


HE  Omaha  National 
Bank  of  Omaha  is  the 

largest  bank  in  the  State  oi  Nebraska. 
^  For  many  years  it  has  been  closely 
identified  with  the  progress  and  develop- 
ment of  the  great  business  industries  of 
Omaha,  and  its  name  has  become  a 
synonym  for  strength  and  conservatism 
throughout  the  West.  Sf  It  has  an  ex- 
tensive clientele  in  the  great  agricultural 
district  in  which  it  is  located  and  cor- 
respondents throughout  the  West  to  the 
Coast,  which  enables  it  to  offer  superior 
facilities  for  handling  all  business  in  this 
section.  ^It  hasa  Capital  of  $  1,000,000. 
Surplus  and  Profits  of  over  $400,000 
and     Deposits    of     over    $10,500,000. 

Officers 

J.  H.   MILLARD.   President 
WM.  WALLACE,  Vice-President         C.  F.  McGREW,      Vice-President 
W.    H.    BUCHOLZ,  Cashier  FRANK  BOYD,       Asst.  Cashier 

B.    A.    WILCOX,    Asst.    Cashier         EZRA  MILLARD,  Asst.  Cashier 


IS 


Lobby  of 

The  Central  National  Bank 

Rockefeller  Building,  Cleveland,  (). 


Statement  of  Condition,  July  15,  1908 


Loans  and  Discounts 
United  States  and  Other  Bonds 
Overdrafts        .... 
Furnitm-e  and  Fixtures 


$6,103,027.65 

1,215,932.98 

22,866.60 

50.000.00 


Cash  on  hand 

With  Banks 

With  Treasurer  of  U.  S. 


Capital  Stock 
Surplus 
Profits 

Circulation    . 
Bond  Account 
Deposits 


$1,060,791.21 

2,167.906.59 

50,000.00 


3,278,697.80 
$10,670,525.03 

$1,000,000.00 

500,000.00 

130,430.67 

1,000,000.00 

548.500.00 

7,491,594.36 

$10,670,525.03 


J.  J.  SULLIVAN, Pres. 
C.  A.  PAINE,  Cashier 


E.  W.  OGLEBAY,  Vice-Pres. 
L.  J.  CAMERON.  Asst.  Cash. 


THE  CAPITAL  NATIONAL  BANK 

OF  ST.  PAUL 

is  the  successor  to  the  business  of  the  Capital 
Bank  that  was  organized  in  1880,  and  the 
St.  Paul  National  Bank  that  was  organized  in 
1883.  H  Having  a  directorate  composed  of  prom- 
inent bankers  and  business  men  and  an  official 
staff  who  are  thoroughly  versant  with  condi- 
tions and  credits  as  well  as  with  the  require- 
ments of  their  customers,  it  offers  unsurpassed 
facilities  for  handling  all  branches  of  the  bank- 
ing business  throughout  the  Northwest.  Every 
accommodation  and  courtesy  consistent  with 
sound  banking  methods  will  be  granted.  TjThe 
Capital  National  Bank  has  a  capital  of 
^500,000.00,  surplus  and  profits  approximately 
$100,000.00  and  deposits  of  over  $4,000,000.00. 

Correspondence  is  Invited. 
OFFICERS 

JOHN  R.   MITCHELL,   PRESIDENT 

WALTER  F.  MYERS.  VICE-PRES.      WM.   B.  GEERY,  VlCE-PRES. 

H.   E.    HALLENBECK,   CASHIER      EDW.  H.  MILLER,  ASST.  CASHIER 

E.   A.   SCHROEDER,   ASST.  CASHIER 


1  'fS         ■'^  -'  • 


Hon.  Hugh  McCulloch 

the  first  Comptroller  of  the  Cur- 
rency^ addressing  the  National 
Banks  in  1863^  said: 

"^^O  nothing  to  foster  and 
^^^  encourage  speculation. 
Give  facilities  only  to  legitimate 
and  prudent  transactions.  Dis- 
tribute your  loans  rather  than 
concentrate  them  in  a  few  hands. 
Pursue  a  straightforward,  up- 
right, legitimate  banking  busi- 
ness. Treat  your  customers 
liberally,  bearing  in  mind  that 
the  bank  prospers  as  its  custom- 
ers prosper.'' 


Reproduced  from  a  recent  published  statement  of 

The  National   Bank  of  the   RepubUc  of  Chicago 


PEOPLES 
BANK 

BUFFALO 


WE  DESIRE  TO  IMPRESS 
on  every  banker  the  fact  that  oxir  ser- 
vice in  the  collection  of  Buffalo  items 
cannot  be  excelled;  that  we  are  a  strong,  conser- 
vative Bank  governed  by  careful,  prudent,  yet 
progressive  management ;  and  that  personal 
administration  by  our  officers,  courtesy,  and  faith- 
fulness to  details  are  large  factors  in  our  methods. 
C  Confidence,  popularity,  and  steady  growth  have 
followed  our  effort  to  serve  rightly.  Entrust  to  us  your 
business  and  you  will  not  regret  it.  CVVe  welcome 
correspondence  with  a  view  to  establishing  perma- 
nent relations.  C.  Capital,  Surplus  and  Profits,  Five 
Hundred  and  Sixty  Thousand  Dollars;  Deposits, 
Four  Million,  Three  Hundred  Thousand  Dollars. 

Officers 

A.  D.  BISSELL,  President 
C.  R.  HUNTLEY,       Vice-President        E.  J.  NEWELL,      -       Cashier 
HOWARD  BISSELL,  Ass't.  Cashier         C.  G.  FEIL,       -       Asst.  Cashier 


•5^e^ 


First  National  Bank 

Minneapolis,  Minnesota 


Capital 

$2,000,000 

Surplus 

and  Profits 

2,062,602 

Deposits 

15,000,000 

Officers 

F.  M. 

PRINCE 

President 

C.  T. 

JAFFRAY            Vice 

-President 

GEO. 

F.  ORDE 

Cashier 

D.  MACKERCHAR  Asst.  Cashier 

ERNEST  C.  BROWN,   Asst.  Cashier 
H.  A.  WILLOUGHBY,   Asst.  Cashier 


L^ 


IP 


WESTERN  TRUST  & 
SAVINGS  BANK 

THE  "ROOKERY"  CHICAGO 
Established  1873.       Capital,  One  Million  Dollars. 


OFFICERS 

JOSEPH  E.  OTIS.  .        .         President  WALTER  H.   WILSON.  Vice-President 

LAWRENCE   NELSON.  Vice-President  WILUAM  C.  COOK.       .        .        Cashier 

ADDISON  CORNEAU,  .    Assi.  Cashier  ALBERT  E.  COEN.  Auditor 

LOUIS  H.   SCHROEDER,  Manager  Bond  Sales  Department 
J.  J.   RAHLF,  Manager  Foreign   Exchange  Department 


W.  G.  WALLING. 


COMMERCIAL 


TRUST  DEPARTMENT 

Secretary  CLARK    S.    JENNISON.  Asst.  Secretary 

DEPARTMENTS 


Accounts  of  Banks,  Bankers,  corporations,  firms  and 
individuals  received  on  the  most  favorable  terms.  Loans 
made  on  approved  notes  and  collateral.  Time  or  demand 
interest  bearing  certificates  of  deposit  issued. 

SAVINGS  Interest  at  the  rate  of  3  per  cent,  per  annum,  compounded 

semi-annually,  allowed  on  savings  deposits. 

BOND  Government.  Municipal  and  Corporation  bonds  bought  and 

sold.  We  at  all  times  have  in  this  department  a  choice 
line  of  high  grade  securities  for  sale.  Advice  to  investors 
cheerfully  given. 

FOREIGN  Letters  of  Credit  and  Traveler's  Checks  issued,  available 

all  over  the  world.  Foreign  remittances  and  collections 
made.     Foreign  Exchange  bought  and  sold  at  best  rates. 

TRUST  We  are  authorized  by  law,  and  are  completely  equipped,  to 

act  as  Administrator,  Executor,  Guardian,  Conserv^ator, 
Assignee  and  Receiver.  Also  act  as  Transfer  Agent  and 
Registrar  of  stock  and  bond  issues.  Make  investments  and 
act  as  agent  in  the  collection  and  disbursement  of  incomes. 
Trust  funds  and  trust  investments  are  kept  separate  from 
the  assets  of  the  Bank. 

The  above  departments  are  all  managed  by  capable  officers,  especially 
qualified  and  selected  with  regard  to  the  efficient  and  intelligent  perform- 
ance of  the  functions  connected  therewith,  consequently  giving  our  cus- 
tomers the  highest  degree  of  service. 


ai 


The  Peoples  State  Bank 


Detroit,  Michigan 


Capital  and  Surplus,  $3,000,000 

Accounts  of  Banks,  Bankers,  Firms,  Corpora- 
tions and  Individuals  received.  Well  established 
collection  facilities.   Correspondence  invited 


Officers 


GEORGE  H.  RUSSEL, 

M.  W.  O'BRIEN.  Vice-Pres. 

H.  C.  POTTER,  Jr.,     . 

GEO.  E.  LAWSON, 

R.  S.  MASON, 

F    A.  SCHULTE, 

AUSTIN  E.  WING, 

H.  P.  BORGMAN, 

k.  "W.  SMYLIE, 

J.  R.  BODDE, 

GEO.  T.  COURTNEY, 


President 

and  Chairman  of  Board 

Vice-President 

Vice-President 

Vice-President 

Vice-President 

Cashier 

C-ishier  Savings  Dept. 

Manager  Credit  Dept. 

Assistant  Cashier 

Auditor 


Directors 


R.  A.  ALGER 
GEORGE  H.  BARBOUR 
W.  T.  BARBOUR 
H.  M.  CAMPBELL 

B.  S.  COLBURN 

C.  A.  DuCHARME 
JEREMIAH  DWYER 
HALEY  FISKE 

F.  J.  HECKER 
GEO.  E.  LAWSON 
H.  B.  LEDYARD 


R.  S.  MASON 
FRED.  T.  MORAN 
M.  J.  MURPHY 

p.  H.  McMillan 

M.  W.  O'BRIEN 
H.  C.  POTTER,  Jr. 
LOUIS  ROTHSCHILD 
GEO.  H.  RUSSEL 
HENRY  RUSSEL 
HUGO  SCHERER 
F.  A.  SCHULTE 


THE  FIDELITY  TRUST  COMPANY 
of  New  York,  is  especially  organized  and 
equipped  to  provide  all  the  facilities  of  a  mod- 
em Banking  Institution,  handling  the  accounts  of 
Banks,  Trust  Companies,  Individuals,  Firms  and  Cor- 
porations. SF  It  seeks  to  transact  business  on  legitimate, 
straight  forward  up-to-date  methods.  The  adoption 
and  maintenance  of  this  policy  has  gained  for  the  com- 
pany a  prestige  and  standing  worthy  of  an  institution 
many  years  its  senior.  It  opened  for  business  May  22, 
1907.  On  May  22,  1908,  it  had  over  one  thousand 
accounts  on  its  books,  aggregating  in  deposits  $4,208,- 
172,  and  since  that  date  these  figures  have  shown  a 
gratifying  increase.  SF  The  directorate  is  composed 
of  thorough,  practical  business  men  and  bankers 
whose  prominence,  strength  and  influence  have  ob- 
tained for  the  company  a  marked  degree  of  confidence 
in  the  business  community.  *IF  All  communications 
relative  to  business  receive  prompt  official  attention. 

Capital  and  Surplus,  $1,500,000 

Officers 

SAMUEL  S.  CONOVER,  President 

■WM.  H.  BARNARD,  JOHN  W.  NIX,  Vice-Presidents 

ANDREW  H.  MARS,  Secretary  STEPHEN  L.  VIELE,  Assistant  Secretary 


v^ 


m 


The  Peoples  National  Bank 


Pittsburgh,  Pa. 


PITTSBURGH  owes  much  or  its  marvelous  growth  to 
a  number  o\  prominent  and  successtul  merchants  and 
manufacturers,  who,  in  the  early  "sixties"  realized  that  the 
citv  w^ould  eventually  become  a  great  industrial  center,  pro- 
vided it  was  supplied  with  ample  banking  capital  to  meet 
its  growing  requirements. ^With  this  in  view'  they  organized 
THE  PEOPLES  NATIONAL  BANK  in  1864,  with  a 
Capital  of  51,000,000 — with  authority  to  mcrease  to 
52,000,000  —  thus  showing  their  wisdom  in  preparing  for 
the  city's  future  greatness  as  a  manufacturing  metropolis. 
^  As  an  indication  of  the  Bank's  successful  management 
during  the  FORTY-FOUR  YEARS  of  its  existence,  it 
has  paid  dividends  amounting  to  83,805,000  —  and  accu- 
mulated a  surplus  of  Si, 800,000 — out  of  its  earning;s.  The 
total  resources  now  are  5 16,000,000.  While  it  has  never 
departed  from  a  conservative  policy  during  its  history,  it 
has  always  been  progressive  and  up-to-date  in  its  methods, 
and  today  it  stands  as  one  of  the  foremost  banks  in  the 
National   system. 


S.  R.  FLYNN,  Pkksident 
G.  A.  RYTHER,  Cashier 


J.   A.   SPOOR,  Vice-President 
G.   F.   EMERY,  Ass'r  Cashier 


Dl  RECTO KS 


J.  OGDEN  ARMOUR 
JAMES  H.  ASH  BY 
SAMUEL  COZZENS 
S.  R.  FLYNN 


A.  G.  LEONARD 
EDWARD  MORRIS 
G.  A.  RYTHER 
J.  A.  SPOOR 


A  BANK'S  affiliations  suggest  its  strength 
and    its  ability  to  bring   about    certain 
definite  results.    THIS  FACT  SPEAKS  FOR 


THE  LIVE  STOCK 

EXCHANGE    NATIONAL 

BANK  OF  CHICAGO 


whose  close  connections  with  great  Live  Stock 
interests  make  of  it  an  effective  vehicle  for  hand- 
ling to  your  advantage  your  live  stock  funds. 


Capital 

Surplus  and  Profits 


$1,250,000.00 
350,000.00 


Reserve  agent  for  National  Banks.    Accounts 
of  Banks,  Bankers  and  Corporations  Solicited. 

Located  Center  World's  Great  Live  Stock  Market 
Union  Stock  Yards,  Chicago 


The    First    National    Bank 

St.  Joseph,  Missouri 


Cx\PITAL 
SURPLUS 


5500,000.00 
300,000.00 


This  hank  is  located  in  the  heart  of 
the  greatest  agricultural  district  in 
the  world.  We  consistently  follow 
a  conservative  policy  and  invite 
patronage,  feeling  confident  that 
our  facilities  lor  rendering  prompt 
and  efficient  service   is  unsurpassed. 

OFFICERS 

CHARLES  PASCH£            -  -           President 

J.  T.  TREXERV           -        -  Vice-President 

E.  C.  HARTWIG          -        .  -        -     Cashier 

W.  F.  MAXWELL       -        -  Assistant  Cashier 


--^  ^T 


H 


J^^ 


THE    MERCHANTS 
NATIONAL     BANK 
^BURLINGTON,  IOWA, 

established  in  Eighteen  Hun- 
dred and  Seventy.  SF  Its  Cap- 
ital, Surplus  and  Undixided 
Profits  of  two  hundred  and 
thirty  thousand  dollars  with  a 
record  of  thirty-eight  years  of 
ever  increasing  business,  offers 
its  services  for  your  Iowa 
business. 


J.  L.  EDWARDS,    President  W.  E.  BLAKE,  Vice-President 

JAMES  MOIR,  Vice-President  ALEX  MOIR,  Vice-President 

H.  J.  HUNGERFORD,  Cashier 
F.  L.  HOUKE,  Asst.  Cashier  C.  L.  FULTON,  Asst.  Cashier 

DIRECTORS 

T.  W.  BARHYDT,  Chairman         JAMES    MOIR  ALEX.  MOIR 

H.  A.  BROWN  W.  C.  TUBES  N.  S.  YOUNG 

W.  E.  BLAKE  W.  W.  COPELAND       J.  L.  EDWARDS 


Icic- 


Mm 


^ 


rhe  Northwestern  National  Bank 


Minneapolis,  Minn. 


Capital  and  Surplus,  $4,000,000 
Deposits      .       .      .     $20,000,000 


OFPICERS 


WM.  H.  DUNWOODY 
M.  B.  KOOX       . 
E.  W.  DECKER    . 
JOSEPH  CHAPMAN,  Jr. 
A.  A.  CRANE       . 


President 
Vice-President 
\'icePresident 
Vice-President 
Vice-President 


I.  F.  COTTON 


FRANK  E.  HOLTON    . 
CHAS.  \V.  FARWELL    . 
W.  F.  McLANE 
ROBT.E.MACGREOOR 
S.  S.  COOK      . 

Assistant  Cashier 


Cashier 
Assistant  Cashier 
Assistant  Cashier 
Assistant  Cashier 
Assistant  Cashier 


ate>>"''     -:——--         - 


i^ 


^1 


ll^g^. 


m 


^ 


THAT  they  are  Endowments  in  Chrysalis  dis- 
tinguishes the  regular  life  policies  of  the  Mutual 
Benefit  Life  Insurance  Company,  from  those  of 
all  other  companies. 

Their  Complete  Metamorphosis  from  policies  payable  by  their  orig- 
inal terms  "at  death  only"  into  Endowments  payable  at  a  certain  and 
gradually  diminishing  age,  or  at  prior  death,  results  from  their  holders 
exercising  their  unique  contract  right  of  applying  their  annual  dividends 
to  the  purpose  of  thus  transforming  them. 

This  "  Accelerative  Endowment"  feature  assures  an  Independent 
Old  age  to  the  Insured  as  well  as  an  Independence  to  His  Family  in  the 
event  of  his  early  death,  at  the  Lowest  of  Life  Rates. 


The  Vice-President  of  The  Merchants  National 
Bank  of  Cincinnati  endorses  this  Accelerative 
Endowment  Plan  in  the  following  letter : 


»U  U  S,      S300. 


iri)r  fflprrbanta  National  iBank 


CI  NC  i  N  NATI,    O. 


C.    GOSMORM.    VICE-PRES. 
W.    BROWN,     VICe-PRES. 

P.    STAMM.     CASHIER 


l_S.    PRESIDENT 
GEO.    R.    BAl_CH.    VICE-PRES. 
M.    C.    YERGASON.    VICE-PRES. 
C.    A.    STEVENS.  ASS-T   CASHIER 


May  4,  1908. 
Messrs.  L.  D.  Drewry  ^  Co.,  State  Agents, 

The  Mutual  Benefit  Life  Insurance  Co. 
City. 
Gentlemen  : 

I  am  today  in  receipt  of  your  company's  check  to  cover  the  amount  due 
me  under  my  policy  No.  89,166,  issued  in  1877,  at  age  32,  for  $5,000,  which  has 
just  matured  as  an  encowment. 

I  am,  naturally,  pleased  with  the  result  of  this  policy,  as  I  took  it  upon 
the  Ordinary  Life  plan  to  furnish  me  protection  at  the  lowest  rate,  the  pre- 
mium on  the  $5,000  amounting  to  $118.50  per  year.  The  dividends  have  been 
left  with  the  company  from  thebeginning,  to  convert  the  policy  into  an  endow- 
ment, and  it  matures  in  31  years,  giving  me  not  only  the  insurance  at  the 
straight  life  rate,  but  better  than  two  per  cent,  compound  interest  on  the 
money  paid  in. 

Very  truly  yours, 

W.  W^.  BRO'WN. 


The  Accelerative  Endowment  Plan  is  written   only  by 

trte  iilutual  ^mdit  Hiit  3ns!.  Co. 

of  Newark,  New  Jersey 
FREDERICK   FRELINGHUYSEN,   President 


^£ 


x^preiaKiJf~vr;rXi£:^xigiJ»sOiA-£ 


m 

m 


1 


Your  Vacation 


ta^ 


A  combination  of  water  and  rail  routes,  affords  a  trip  of  unusual  attractiveness. 
An  invigorating  ocean  trip  from  New  York  on  magnificent   1 0,000-ton  ships.     Suites, 
staterooms,  library,  smoking  room,  baths,  excellent  cuisine.     A  sojourn  in  New  Orleans, 
the   half-French,  half-American  city,  always  brimful   of    interest.     Continue    on    Pullmans 
through    the    great   harvesting    sections  of    the  South    and    Middle  West.     Visit    Louisville, 
St.  Louis,  Cincinnati,  Cleveland,  Chicago,  Indianapolis,  Detroit,  etc.    Stop  off  at  Niagara  Falls, 
and  then  home,  after  a  most  delightful  and  restful  trip. 

Rate,  round  trip,  $63.00 

including  Meals  and  Berth  on  Steamer 


Send  for  copy  of 

^A  Hundred  Golden  Hours  at  Sea 

Descriptive  of  the 

SOUTHERN   PACIFIC  STEAMSHIPS 

NEW  YORK:  TO  NEW  ORLEANS 

L    H.  NUTTING,  General  Passenger  .\gent 
M9  BROADWAY,  NEW  YORK 


9? 


Cf)e  Jfirsft  i^attonal 
panfe  of  iiltlttiaufeee, 

with  a  capital  and  sur- 
plus of  two  and  one-half 
million  dollars  and  de- 
posits of  fifteen  millions, 
esteems  the  patronage  of 
''out-of-town"  banks 
and  accords  them  fair 
and  liberal  treatment. 


m 


TTbe 

Clevelanb 

ITrust  Company 

Cleveland,  Ohio 

Capital,  $2,500,000     Surplus,  $2,500,000 

RESERVE  accounts  of  Firms,  Corporations,  and 
Individuals  cordially  invited,  and,  if  deposited 
under  savings  rules,  they  will  draw  4  per  cent,  interest. 
C[  Through  our  bond  department,  we  handle  carefully 
selected  issues  of  municipal  and  corporation  bonds,  yield- 
ing  the   investor   from    4    to    6    per    cent,   per   annum. 

Correspondence  solicited 


m 


NATIONAL  COPPER  BANK 


of  New  York 


Capital,       -         -         $2,000,000 
Surplus  and  Profits,  2,382,000 

Deposits,   July  15,  1908.         1  8,000,000 
Opened  for  business,  May  1 ,  1 907 


Directors 

F.  LOTHROP  AMES.  Boston 

JAMES  M.   BECK,   Former  Assistant  U.  S.  Attorney  General 

JAMES  C.  BISHOP.  Redmond  &  Co. 

CHARLES  F.   BROOKER,   President  American  Brass  Co. 

W.  R.  CRAIG.  Craig  &  Jenks,  Cotton  Commission  Merchants 

H.  O.  HAVEMEYER.  Jr.,   Brooidyn  Eastern  District  Terminal 

H.  H.  HEWITT,  President  Magnus  Metal  Co. 

JAMES  JOURDAN,  President  Brooklyn  Union  Gas  Co. 

ADOLPH  LEWISOHN.   President  United  Metals  Selling  Co. 

WILLIAM  A.   PAINE.  President  Copper  Range  Consolidated  Co. 

ROBERT  C.  PRUYN.  Prest.  Nat.  Commercial  Bank.  Albany.  N.  Y. 

HENRY  H.  ROGERS.  Jr..  Director  Amalgamated  Copper  Co. 

F.  W.  ROEBLING,  President  J.  A.  Roebling  Sons'  Co. 

CHARLES  H.  SABIN.  President 

GEORGE  R.  SHELDON,  W.  C.  Sheldon  and  Co. 

R.  M.  STUART- WORTLEY.  Treasurer  United  Metals  Selling  Co. 

Officers 

CHARLES  H.  SABIN.  -  -  President 
JOHN  D.  RYAN,  -  -  Vice-President 
THOMAS  F.  COLE.     -  Vice-President 

URBAN  H.  BROUGHTON,  Vice-President 

WALTER  F.  ALBERTSEN.     -      Cashier 

JOSEPH  S.   HOUSE.       -      Assistant  Cashier 

Depositary  of  the  United  States,  State  and  City  of  New  York 


m 


.■*r^35^<ic:aro»ia*;':K!a;---JL 


kli 


n 

o 

C 
> 


"Z 

c 

n  K 

E  w 

;>  c/o 
H  ^ 

^   W 
-^ 

I— I 

r 
> 
o 
w 
r 


> 


O 

I— I 

> 

O 

H 

H 

O 

O 

s 


I 

/ 


A  «i 


m 


The  ISrgtstrar  nnh  Q^trnxafn  (tmxpnm 
of  35  Nassau  Street,  New  York  City, 
represents  over  TWO  BILLIONS  of 
capital  and  offers  the  best  of  faciH- 
ties  as  Transfer  Agent  or  Registrar 
of  Hsted  or  unHsted  securities  and 
attends  to  payment  of  dividends. 
^The  Company  also  organizes  cor- 
porations under  the  laws  of  the  lead- 
ing charter  granting  States  of  the 
East,  acts  as  Registered  Agent  and 
generally  assists  in  all  corporate 
matters. 


Transfer  Agent 

Organization 

Registrar 

Payment  of  Dividends 


m 


^: 


THE 


NASSAU 


BAN 


iT^yymrt. 


THE  NASSAU  BANK  is  one 
of  New  York's  old  conserva- 
tive banking  institutions.  It 
was  established  in  1852,  and  its 
founders  made  a  rule,  to  always  con- 
serve the  best  interests  of  its  clientele, 
which  has  been  the  policy  of  each  suc- 
ceeding management.  It  transacts  all 
business  that  lies  in  the  channel  of 
legitimate  banking.  It  issues  letters 
of  Credit  and  Travelers'  Cheques, 
available  in  all  parts  of  the  world.  It 
is  thoroughly  equipped  to  render  iirst- 
class  service  and  invites  the  accounts 
of  firms,  corporations  and  individuals, 
offering  them  as  liberal  treatment  as 
safe    banking   methods  will    permit. 

OFFICERS 

WILLIAM  H.  ROGERS     -     President         EDWARD  EARL  -        -        Cashier 

JAMES  C.  BELL      -        Vice-President        W.B.NOBLE         -       Assistant  Cashier 
JOHN  MUNRO        -        Vice-President         H.  P.  STURR         -        Assistant  Cashier 


JAMES  C.  BELL 
WILLIAM  H.  ROGERS 


DIRECTORS 

HENRY  C.  MILLER 
SAMUEL  R.  WEED 
JOHN  MUNRO 


HARRY  BRONNER 
RICHARD    YOUNG 


!^/ 


i^ii 


m 


The  iRrjgtstrar  anii  Zxmmitx  (^nmpanu 
of  35  Nassau  Street,  New  York  City, 
represents  over  TWO  BILLIONS  of 
capital  and  offers  the  best  of  facih- 
ties  as  Transfer  Agent  or  Registrar 
of  hsted  or  unHsted  securities  and 
attends  to  payment  of  dividends. 
^The  Company  also  organizes  cor- 
porations under  the  laws  of  the  lead- 
ing charter  granting  States  of  the 
East,  acts  as  Registered  Agent  and 
generally  assists  in  all  corporate 
matters. 


Transfer  Agent 

Organization 

Registrar 

Payment  of  Dividends 


m 


THE 


NASSAU 


rnp^HE  NASSAU   BANK   is   one 
of   New  York's   old   conserva- 


1 


tive  banking  institutions.  It 
was  established  in  1852,  and  its 
founders  made  a  rule,  to  always  con- 
serve the  best  interests  of  its  clientele, 
which  has  been  the  policy  of  each  suc- 
ceeding management.  It  transacts  all 
business  that  lies  in  the  channel  of 
legitimate  banking.  It  issues  letters 
of  Credit  and  Travelers'  Cheques, 
available  in  all  parts  of  the  world.  It 
is  thoroughly  equipped  to  render  first- 
class  service  and  invites  the  accounts 
of  firms,  corporations  and  individuals, 
offering  them  as  liberal  treatment  as 
safe    banking   methods  will    permit. 

OFFICERS 

WILLIAM  H.  ROGERS  -  President  EDWARD  EARL  -  -  Cashier 
JAMES  C.  BELL  -  Vice-President  W.  B.  NOBLE  -  Assistant  Cashier 
JOHN  MUNRO        -        Vice-President        H.  P.  STURR         -        Assistant  Cashier 


JAMES  C.  BELL 
WILLIAM  H.  ROGERS 


DIRECTORS 

HENRY  C.  MILLER 
SAMUEL  R.  WEED 
JOHN  MUNRO 


HARRV  BRONNER 
RICHARD    YOUNG 


nr 


.HE  location  of  the  IRVING  NATIONAL 
I  EXCHANGE  BANK,  at  West  Broadway  and 
Chambers  Street,  New  York,  in  the  very  center 
of  the  great  wholesale  produce  and  commission  distnct, 
naturally  makes  it  STRICTLY  A  COMMERCIAL 
BANK.  C,  With  a  directorate  of  unusual  strength, 
composed  of  some  of  New  York's  most  substantial 
business  men  and  bankers,  and  an  official  staff  of  trained 
men  who  are  familiar  with  every  requirement  of  its 
large  clientele,  the  IRVING  EXCHANGE  is  prepared 
to  render  such  service  to  banks,  merchants,  manufac- 
tiirers  and  individuals,  that  once  a  business  relation  is 
established  it  is  seldom,  if  ever,  changed.  C  Capital, 
$2,000,000.  Surplus  and  Profits,  $1,290,000.  and  De- 
posits aggregating  $23,000,000. 


OFFICERS 


LEWIS  E.  PIERSON 
JAMES  E.  NICHOLS 
BENJ.  F.  "WERNER 


President 

Vice-President 

Cashier 


CHAS.  L.  FARRELL 
ROLLIN  P.  GRANT      - 
DAVID  H.  G.  PENNY 


Vice-President 
Vice-President 

-     Asst.  Cashier 


HARRY  E.  V/ARD.  Asst.  Cashier 


i 


m 


jmm 

k/       1     ll^lkf^l         l/^ik  l-]1^I^^S£ 

RlCKKORb  VlRfcmi/; 


noiitaiini'i  .iiri  "inwrnaraanitt  r^jjuixtm/oaitmsamnsiSAm^K^^ 


To   Pittsburgh,   Dr. 

Vast  natural  resources,  busy  industries,  and  capable 
financial  management  place  the  whole  country  in 
debt  to  Pittsburgh  and  pour  a  steady  stream  of  gold 
into  her  coffers. 

A  million  dollars  a  day  she  pays  her  laborers, — 
and  collects  from  the  nation  she  enriches. 

Fifteen  cars  are  filled  with  the  product  of  her 
mines  and  mills  each  minute  of  time,  and  a  waiting 
country  gladly  accepts  the  consignment. 

To  collect  her  bills  and  finance  her  immense  industries  she 
has  a  hundred  banks,— strong,  conservative,  ably  managed. 

In  the  front  rank  of  these  institutions  stands  the  Mellon 
National  Bank— one  of  the  twenty  big  banks  of  the  country— 
with  its  capital  of  $4,000,000  and  resources  exceeding  $4 1 ,000,000. 
Its  officers  and  directors  have  been,  and  now  are,  active  in 
the  organization  and  management  of  the  principal  industries  of 
the  City.     They  are  men  of  substance — creditors  of  the  Creditor 

City. 

The  Bank  controls  a  large  amount  of  desirable  business, 
and  can  make  an  attractive  proposition  to  other  banks  and  trust 
companies,  with  due  profit  to  itself. 

Write  for  particulars. 

Mellon  National  Bank 

PITTSBURGH 


^Ci 


R 

X 

H 

> 
r 

w 

►<; 

^ 

ro 

cr> 

a. 

n 

H 

a 

> 

y. 

H 

> 

K 

> 

1— » 

Z 

^ 

C 

cr; 

b 

^ 

a 

o 
o 

b 

> 

r 

P 

to 

?0 

IT! 

c 

> 

o" 

?^ 

1^ 

r 

G 


>^  p  > 

[/I 

s  > 

Cl 

3     ^ 

r 

2 

e:.  K 

l-H 

1?  ?^ 

*Z 

1           rx 

^ 

n  W  !  V  P  R  H  i   i    t 


The  Merchants  Exchange 

National  Bank  of 

New  York 

TI?OR  three  quarters  of  a  century 
-■-  this  substantial  institution  has 
maintained  the  conhdence  of  the 
merchants  and  business  men  of  New 
York  from  whom  it  has  received  its 
patronage.  C,  It  is  strictly  a  commer- 
cial bank,  having  no  stock  brokers 
accounts  or  Wall  Street  affiliations, 
and  it  has  successfully  passed  through 
all  of  the  great  financial  crises  that 
has  visited  this  country  since  1829, 
the  year  it  was  organized,  which  is 
a  guarantee  of  conservatism  in 
management.  C.  It  offers  its  services 
to  out-of-town  banks  and  bankers, 
assuring  them  they  will  receive  as 
liberal  treatment  as  is  consistent 
with    careful    banking    methods. 


ff^ 

i.G.. 

-.-^'"  -Wl 

,,,..-               -r- 

m 


^ 


55 


'111   %'l  g 

i  flu. 


3  *  ^  •  i  3 « !  ^  * 
33333*^33; 


3  ;3  -^^V~^ 
♦1   i^  if, 


The  Corn  Exchange  National 
Bank  of  Chicago 


Capital 
Surplus 
Undivided  Fronts 


$3,000,000.00 
3,000,000.00 
1,750,000.00 


Offic 


EKNEST  A.  HAMILL,   President 


CHARLES  L.  HUTCHINSON  Vice-President 
D.  A.   MOULTON      -  -        Vice-President 

FRANK.  W.  SMITH  -  -        Cashier 

J.  EDWARD  MAASS  Assistant  Cashier 


CHAUNCEV  J.  RLAIR  Vice-President 
JOHN  C.  NEELV  -         Secretary 

B.  C.  SAMMOXS         Assistant  Cashier 
JAMES  G.WAK.EFIELD  Ass't  Cashier 


Directors 


CHARLES  H.  MACRER 
CHAUNCEV  J.   BLAIR 
EDWARD  B.  BUILER 
CLARENCE  BUCKINGHAM 
WATSON  F.  BLAIR 
CHARLES  L.  HUTCHINSON 
EDWARD  A.  SHEDD 


MARTIN  A.  RVERSON 
CHARLES  H.  HULBURD 
BENJAMIN  CARPENTER 
ISAAC  G.  LOMBARD 
EDWIN  G.   FOREMAN 
FREDERICK  W.  CROSBY 
ERNEST  A.  HAMILL 


"^j 


THE  COMMERCIAL  TRUST 
COMPANY  OF  NEW  JERSEY 
is  located  in  the  Commercial  Trust  Company 
Building,  adjoining  the  Pennsylvania  Railroad 
Ferries,  Jersey  City,  New  Jersey  ;  practically  within  the 
banking  district  of  New  York,  and  affords  customers  equal 
facilities  and  greater  advantages  than  the  New^  York  banks 
and  trust  companies.  C,  With  a  Capital,  Surplus  and 
Profits  of  over  $3,000,000  and  a  Board  of  Directors  com- 
posed of  some  of  the  most  prominent  bankers  and  business 
men  of  this  country,  it  offers  to  customers  the  advantages 
of  a  general  banking  and  trust  company  business,  together 
with  the  most  modern  Safe  Deposit  accommodations  to 
be  found  in  the  State.  The  Company  has  special  facilities 
for  collecting  checks  on  any  part  of  the  country.  C,  Bank 
accounts  and  other  personal  property  of  corporations  of 
States  other  than  New  York,  doing  business  in  New  York, 
and  of  individuals,  are  taxable  when  kept  in  New  York.  It 
is  therefore  evident  that  it  is  of  great  advantage  both  to 
individuals  and  corporations  to  have  Safe  Deposit  accom- 
modations and  Bank  Accounts  in  the  Commercial  Trust 
Company  of  New  Jersey. 

Officers 


JOHN  W.  HARDENBERGH 
ROBERT  S.  ROSS     - 
W^ILLIAM  J.  FIELD 
JAY  S.  PERKINS 
J.  RICHARD  TENNANT 


President 

Vice-President 

Sec'y  and  Treasurer 

Ass't  Treasurer 

Ass't  Secretary 


Executive  Committee 


C.   C.  CUYLER 
JOHN  W.  HARDENBERGH 
JOHN  A.  MIDDLETON 
MOSES  TAYLOR  PYNE 


ROBERT  S.  ROSS 
MYLES  TIERNEY 
JOHN  J.  VOORHEES 
GEORGE  W^.  YOUNG 


s1S 


(Irargp  |3.|flung  $c  ([l0mpnti|. 


^ankpra 


Members   New  York  Stock  Exchange 


Mutual  Life  Building,  59  Cedar  Street,  New  York 


INVESTMENT   BONDS 


INVESTMENT  STOCKS 


We  buy  and  sell  listed  and  unlisted  securities, 
and  give  particular  care  and  attention  to  the  orders 
of  individual,  National  and  State  Banks,  Savings 
Banks,  Trust  Companies   and  other  investors. 


We  Invite  Your  Business 


^ 


m 


The  Chase  National  Bank 

of  the  City  of  New  York 


Capital  _  _  _ 

Surplus  and  Profits  (Earned) 

Deposits,  July  15,   1908, 


$5,000,000 

$5,104,992 

$104,558,678 


A.  B.  HEPBURN 
S.  H.  MILLER 
C.  C.  SLADE 
E.  A.  LEE 


Officers  : 

President  A.  H.  WIGGIN 

Cashier  W.  E.  PURDV       - 

Assistant  Cashier  H.  M.  CON  KEY 

Assistant  Cashier  A.  C.  ANDREWS 

Directors : 


Vice-President 
Assistant  Cashier 
Assistant  Cashier 
Assistant  Cashier 


H.  W.  CANNON,  Chairman 

George  F.  Baker         James  J.  Hill  A.  Barton  Hepbvrn  John  \.  Watereirv 

Grant  B.  Schley  Albert  H.  Wiggin  George  F.  Baker,  Jr. 


We  receive  accounts  of  Banks,  Bankers,  Corporations,  Firms  and 

Individuals  on  favorable  terms,  and  shall  be  pleased  to  meet 

or  correspond  with  those  who  contemplate  making 

changes  or  opening   new  accounts. 


.J 


Empire  f^rust  Companp 


New  York  City 


We  grow  by  doing 

Note  the  comparative  growth  of  this  Company 
since  its  organization. 

March  19,  1904       -  -  -  $1,915,587.18 

December  31,  1904  -  -  3,195,465.56 

December  31,  1905  -  -  6,551,035.57 

December  31,  1906  -  -  6,184,955.78 

December  31,  1907  -  -  6,421,510.76 

June  30,  1908           -  -  -  9,632,229.13 

August  20,  1908      -  -  -  12,520,175.32 

This  showing  is  the  result  of  conservative  banking  and  care- 
ful attention  to  the  business  intrusted  to  us.  Our  policy  has  been, 
and  is  now,  to  firmly  establish  a  reputation  for  safety  and  conserva- 
tism and  to  refuse  all  propositions  involving  a  risk  as  an  inducement 
to  an  extensive  showing.  Our  assets  are  all  readily  convertible 
into  cash. 

New  York  is  the  financial  center  of  the  United  States  if  not  of 
the  World  and  a  correspondent  at  that  center  is  not  only  desirable 
but  almost  a  necessity  for  the  satisfactory  conduct  of  banking  and 
fiduciary  business. 

Select  your  banking  institution  wisely  and  then  give  it  your 
confidence  and  assistance. 

It  is  not  only  the  balances  maintained  with  us  by  our  friends 
which  gives  us  prestige  but  it  is  also  the  outside  influences  exerted 
by  them  in  our  favor  \vhich  benefit  us  largely. 

Capital,  Surplus  and  Undivided  Profits 
$1,600,000 

NEW    YORK.    Main    Office,    42    Broadway 
LE  ROY  W.  BALDV/IN,  President        H.  M.  GOUGH,  Secretary 

Branches:     487  Fifth  Avenue;     242  E.  Houston  Street 

LONDON,  Foreign  Office,9  NewBroad  Street 
W.  H.  PARKER,  London  Secretary. 


HE  National  Bank  of  Commerce  in  New  York  has  a 
thoroughly  up-to-date  organization  and  equipment  for 
the  transaction  of  all  branches  of  foreign  and  domestic 
banking,  and  solicits  correspondence  from  banks  and 
bankers  contemplating  opening  new  or  additional 
accounts  in  the  metropolis. C  With  an  intimate  knowledge 
of  the  New  York  requirements  of  banks  throughout 
the  country,  assurance  is  given  of  fair,  intelligent  and  courteous 
consideration.  CThe  combined  Capital,  Surplus  and  Undivided 
Profits  of  the  Bank  is  over  Forty  Million  Dollars. 

National  Bank  of  Commerce  in  New  York 


m: 


m 


#C  rf^  wis 

^^I^.         '-'^m^^        J^h-s\ 


The  Fort  Dearborn  National 
Bank  ^/^  Chicago 

Totalresources  of  S  i  3, 500,000, adirec- 
torate  composed  of  prominent,  suc- 
cessful business  men  and  bankers,  and 
an  official  stafFof  experienced,  practical 
men  who  make  every  effort,  by  cour- 
teous, personal  attention,  to  give  cus- 
tomers the  most  prompt  and  efficient 
service,  solicits  the  accounts  of  Banks, 
Corporations,  Firms  and   Individuals. 

CAPITAL  -  $1,000,000 

SURPLUS  AND  PROFITS,  $400,000 

OFFICERS 

WM.  A.  TILDEN  -  -  President 

NELSON  N.  LAMPERT,       -       Vice-Pres.       HENRY  R.  KENT,       -        Cashier 

CHARLES  FERNALD,       -     Asst.  Cashier      COLIN  S.  CAMPBELL,  Asst.Cash. 


>S* 


iS 


^ 


•Si 


■Hifc?*''^ 


THE 
FOURTH  NATIONAL 
BANK  OF  THE  CITY 
OF  NEW  YORK 
OFFERS  TO  DE- 
POSITORS EVERY 
FACILITY  WHICH 
THEIR  BALANCES, 
BUSINESS  AND 
RESPONSIBILITY 
WARRANT. 


5SS^*?n; 

^0W^ 

:7z^>'\ 

w 


\.A 


^ 


m 


The  Phenix  National  Bank 


of  the  City  of  New  York 


Directors 


August   Belmont 

August  Belmont  &  Company 

E.  W.  Bloomingdale 

Capitalist 

Alfred   M.   Bull 

Vice-President 

D.   Crawford   Clark 

Clark,  Dodge  &  Company 

Edwin  A.  Potter 

President,  American  Trust  & 
Savings  Bank,  Chicago 

William 
Pierson  Hamilton 

J.  p.  Morgan  &  Company 

Richard  H.  Higgins 

Harvey  Fisk  &  Sons 

Elbert   H.  Gary 

Chairman  Board,  United 
States  Steel  Corporation 


Directors 


Robert  P.  Perkins 

President  Hartford  Carpet 
Corporation 

Henry  K.  Pomroy 

Pomroy  Brothers 

Geo.CoffingWarner 


George  E.  Roberts 

President   Commercial    Nat- 
ional Bank,  Chicago 

Frederick 
D.    Underwood 

President  Erie  Railroad  Co. 

Irving  A.  Stearns 

Capitalist,  Wilkes-Barre,  Pa. 

Finis  E.  Marshall 

President 


Capital, 
Surplus, 


1,000,000 
500,000 


Officers: 
Finis  E.  Marshall       Alfred  M.  Bull        B.  L.  Haskins 


Vice-President 


Cashier 


H.  C.  Hooley 

.Assistant  Cashier 


^ 


M 


FREDERICK  B.  SCHENCK,  President 
DANIEL  G.  REID,  Vice-Pres.  CHARLES  W.  RIECKS.  2d  V-Pres.  and  Cashier 

FREDERICK  P.  McGLYNN,  Asst.  Cashier        HENRY  S.  BARTOW,  Asst.  Cashier 
HENRY  P.  DAVISON,  Chairman  Executive  Committee 


Capital 
Surplus     ■ 
Undivided  Profits 


$1,000,000 

1.500,000 

900,000 


mi 


0''lSfe!Sffii^0 


m  ,-> 


i^ 


THE  NEW  ENGLAND  NATIONAL 
BANK  of  Kansas  Citv,  Missouri,  con- 
fines itself  strictly  to  commercial 
banking,  believing  that  bv  so  doing  it  can 
best  safeguard  the  interests  of  its  clientele. 
C.  It  has  no  interests  to  conserve,  sa\'e  those 
of  its  patrons.  In  its  directorate  are  men 
who  control  some  of  the  principal  industries 
of  Kansas  City  and  the  great  Southwest. 
C.  Its  equipment  for  prompt,  reliable  and 
efficient  senrice  in  all  departments  is  first  class. 

Capital  and  Surplus,  $1,000,000.00 
Deposits         -        -       11,000,000.00 

New  accounts   invnted 


r^-nspsig»?sa-r'^1 


'&. 


v>^ 


Introductory 

AN  examination  of  the  monetary  and  banking  systems  of  the  world,  brings 
into  prominence  the  fact  that  in  all  the  principal  countries  and  in  a  great 
>-  majority  of  the  lesser  ones,  the  paper  money  is  issued  almost  exclusively  by 
central  banks,  which  also  act  as  the  depositaries  or  treasuries  of  the  respective 
Gov^ernments,  and  each  of  them  serves  as  the  heart  of  the  banking  and  credit 
organization. 

While,  as  will  be  seen,  there  is  a  marked  difference  between  the  charter  powers 
and  methods  of  conducting  business  in  the  central  institutions  of  the  several 
countries,  the  general  principles  governing  the  systems  are  strikingly  similar; 
showing  conclusively  that  the  world's  experience  has  demonstrated  the  superiority 
of  this  plan  of  centralizing  the  paper-money  issuing  powers  and  the  regulation  of 
monetary  affairs  in  general.  In  only  a  few  instances  of  importance  are  Govern- 
ment notes  made  use  of.  In  Germany  and  Italy  a  few  other  banks  are  still 
permitted  to  issue  notes;  in  Scotland,  Ireland  and  Canada  there  are  a  number  of 
such  banks  without  a  central  institution,  but  cooperating.  In  every  case  branches 
of  the  main  banks  provide  for  the  distribution  of  the  facilities  to  all  parts  of  the 
several  countries. 

The  Governments  retain  a  greater  or  less  degree  of  control  over  these  banks; 
in  Russia,  Sweden  and  Bulgaria  the  institutions  are  actually  owned  by  the  Govern- 
ments; in  France,  Germany  and  elsewhere  generally,  the  banks  are  privately-owned 
stock  corporations,  but  in  numerous  instances  the  principal  officers  are  appointed 
by  the  Governments;  in  England,  and  in  a  few  other  countries,  there  is  no  direct 
official  control,  but  the  Governments  exercise  a  supervision,  and  the  banks  are 
conducted  in  harmony  with  the  governmental  policies. 

In  all  countries  the  banks  receive  and  disburse  the  Government  revenues, 
the  public  deposits  being  treated  practically  the  same  as  other  deposits  in  the 
banks  are;  thus  the  countries  have  their  entire  money  supply  always  available  for 
business  purposes  (loans  and  discounts),  instead  of  having  large  amounts  period- 
ically locked  up  idle  in  the  public  treasuries,  (as  is  the  case  in  the  United  States), 
causing  a  contraction  of  the  money-means.  Since  every  million  dollars  of  cash 
standsf  under  reserve  provisions,  for  about  eight  millions  of  deposits  (or  loans), 
the  importance  of  this  feature  to  the  business  interests  is  apparent. 

Central  banks  do  not  generally  receive  deposits  of  individuals  or  make  loans 
to  them;  but  they  do  such  business  for  the  other  banks,  holding  reserves  for 
them  and  furnishing  them  with  cash  by  rc-discounting  their  commercial  paper, 
when  needs  arise.  "(Hence  such  an  institution  is  frequently  called  a  "bank  of 
banks".)  They  also  deal  in  bullion  and  foreign  exchange,  and  exercise  other 
minor  functions. 

Central  banks  are  usually  largely  capitalized  and  carry  substantial  surpluses: 
these,  with  the  other  funds,  give  them  very  considerable  primary  financial  strength, 
which  they  are  permitted  to  increase  by  note-issues  under  varying  regulations. 
Thus  equipped  with  dominant  financiar  power  and  the  capacity  to  increase  the 
local  money-supply  by  issuing  currency,  they  are  able  to  determine  the  current, 
local  discount  (interest)  rates.  The  rates  fixed  by  them  are  those  which  they 
exact  from  the  other  banks  in  rediscounting. 


The  usual  course  pursued  is  for  the  other  banks,  when  they  have  reached  the 
Hmit  of  their  loaning  power,  as  indicated  by  their  reserves,  to  resort  to  the  cen- 
tral bank  with  some  of  their  discounted  negotiable  paper,  duly  indorsed  by  them, 
and  obtain  the  cash  needed  to  enable  them  to  continue  lending.  It  is  a  general 
rule  that  such  paper  have  not  longer  than  90  days  to  run.  Thus  when  business 
is  active  and  expanding,  the  central  banks  in  most  cases  increase  their  note-issues 
to  meet  the  additional  demand  for  loans. 

The  discount  rate  is  in  general  the  indicator  of  the  supply  of  money-means 
relative  to  the  demand;  yet  it  is  to  be  borne  in  mind  that  local  conditions  affect 
the  local  rates;  and  each  country  may  be  said  to  have  its  own  fiormal  rate.  For 
example  Germany's  rate  is  usually  higher  than  that  of  England  and  France; 
Russia's  is  higher  than  Germany's.  Bulgaria  has  a  normal  7%  rate,  whereas 
that  of  Belgium  is  nearer  3^%;  Bulgaria  is  far  less  developed,  has  less  capital, 
and  hence  less  banking  facilities.  It  is  also  to  be  noted  that  the  quoted  rates  of 
central  banks  are  the  minimum  rates;  they  may  exact  more  in  special  cases,  and 
they  frequently  do  so  to  restrict  demands. 

The  note-issuing  power,  so  important  in  this  connection,  is  regulated  sub- 
stantially by  the  amount  of  coin  (usually  gold)  in  the  bank ;  the  rule  and  prac- 
tice varies  quite  materially.  When,  then,  a  pressure  of  demands  reduces  the 
reserve  ratio,  (the  proportion  of  coin  to  notes  and  deposits),  more  coin  must  be 
obtained  and  central  banks  endeavor  to  obtain  it  in  the  markets  where  the  new 
gold  from  the  mines  is  purchasable,  or  from  each  other,  by  raising  discount  rates. 
Gold  usually  flows  from  a  place  where  rates  are  low  to  a  point  where  it  can  earn 
relatively  higher  rates;  relatively  because  of  the  difference  in  normal  rates;  thus 
the  6"o  rate  at  St.  Petersburg  will  not  necessarily  bring  gold  from  Paris  where 
the  3''o  rate  prevails;  conditions  are  adjusted  to  the  normal  rates. 

Discount  rates  at  other  banks,  (known  as  "open  market  rates")  are  usually 
lower  than  those  at  the  central  bank;  they  are  in  competition  for  individual 
business.     Yet  the  rates  rise  and  fall,  in  general,  with  the  central  bank  rates. 

It  is  obvious  that  the  great  banks  have,  under  their. charters,  important  pub- 
He  duties  to  perform.  They  are  the  instrumentalities  by  means  of  which  the 
Governments  provide  the  people  with  tools  of  exchange  and  credit  facilities. 
Profit-making  is  usually  regarded  as  a  secondary  consideration.  Yet  the  func- 
tions are  in  most  cases  so  nicely  adjusted,  that  shareholders  receive  satisfactory 
dividends. 

In  the  following  pages  the  varying  systems  are  discussed;  this  enables  a 
comparison  to  be  made  between  them  and  with  the  unique  system  in  use  here; 
and  there  is  finally  presented  an  account  of  our  former  central  bank,  in  order  to 
recall  that  at  one  time  our  system  was  in  practical  harmony  with  the  world's  best. 


The  British  Banking  System 

THE  BANK  OF  ENGLAND 


The  Bank  of  England,  while  not  the  oldest 
bank,  is  the  most  ancient  of  the  important  issue- 
banks  of  the  world.  It  is  a  privately  owned 
stock  corporation,  tirst  chartered  July  27,  1694, 
upon  lines  devised  by  a  Scotchman,  William 
Paterson.  The  initial  capital  was  ^1,200,000 
and  that  sum  was  loaned  at  8%  to  the  Royal 
Treasury,  by  Paterson  and  his  associates,  who 
were  then  authorized  to  issue  circulating  notes 
upon  this  "public  debt."  The  note-issuing 
power,  however,  was  not  exclusive ;  other  banks 
exercised  this  function  also. 

The  Bank  grew  in  importance  with  the  devel- 
opment of  the  nation, although  not  without  meet- 
ing reverses  in  the  earlier  years.  Its  capital  was 
increased  and  its  charter  modified,  as  occasion 
required;  thus  by  1708  the  capital  stood  at 
;^4,40o,ooo  and  in  171 1  it  was  authorized  to 
issue  notes  beyond  that  sum.  By  18 16,  when 
the  gold  standard  was  adopted,  the  capital  had 
reached  the  present  figure  of  i^ 1 4, 5  53, 000.  The 
increased  capital  was  usually  loaned  to  the 
Government,  and  the  great  needs  of  the  countr}- 
during  the  Napoleonic  wars  compelled  theGov- 
ernment  to  pennit  the  Bank  to  suspend  specie 
payments  from  1797  to  1821.  Notes  were  at  a 
discount  during  this  period.  Troubles  also 
occurred  in  1825,  1826,  and  1837. 

These  disturbances  led  to  the  revisions  of 
the  paper  currency  laws  of  the  Kingdom;  the 
first  (1829)  was  to  prohibit  the  issue  of  notes 
under  ;^5  /;/  England:  the  second  (1833)  made 
the  Bank's  notes  legal  lender  in  England  and 
Wales,  (except  as  to  payments  by  the  Bank 
itself,)  so  long  as  they  continued  redeemable  in 
gold ;  weekly  statements  also  began  at  this  time 
but  were  not  published.  Einally,  in  1844,  the 
other  banks  in  England  were  prohibited  from 
increasing  their  note-issues  and  the  Bank's  issue 
power  was  limited.  The  restriction  is  as  fol- 
lows: The  Bank  may  have  out  notes  based  on 
public  debt  to  the  amount  of  ^14,000,000.  or 
about  the  extent  of  its  capital;  any  issues  in 
excess  thereof  must  be  covered  by  coin  and 


bullion  ;  l)ut  it  may  increase  its  bond-secured 
notes  from  time  to  time  to  the  extent  of  tw'O- 
thirds  of  the  amount  of  the  notes  of  the  other 
banks  permanently  retired. 

The  act  of  1844  also  required  the  separation 
of  the  note-issuing  business  of  the  Bank  and 
its  banking  business ;  and  a  public  weekly 
report  of  its  condition  was  prescribed. 

The  bond-secured  notes  now  amount  to 
;/J'i 8,450,000;  so  that  the  Bank  has,  since  1844, 
acquired  the  right  to  issue  about  ;^4, 45 0,000. 
by  means  of  the  discontinuance  of  the  issue  of 
other  banks;  these  latter  have  still  about 
;^5 00,000  of  notes  in  use  at  this  time.  Thus 
the  Bank  of  England  notes  issued  otherwise 
have  been  gold  certificates,  there  being  no 
authority  under  the  law  to  increase  the  amount 
of  paper  money  except  on  deposit  of  coin  or 
bullion.  But  the  Government  has,  upon  occa- 
sions of  trouble,  temporarily  given  the  Bank  the 
right  to  increase  the  issue  beyond  the  limit  (on 
its  credit),  in  order  to  stay  panics;  in  1847. 
1857  and  1866  the  restriction  of  the  bank  act 
was  thus  suspended.  Actually  the  power  was 
used  only  in  1857;  the  mere  authority  served 
to  allay  distrust  in  the  two  other  years. 

The  Bank  acts  as  the  Treasurer  of  the  Gov- 
ernment; it  holds  other  (private)  deposits  as 
well,  but  rather  limited  in  amount,  except  for 
other  banks,  which  carry  large  reserve  balances 
there;  it  deals  in  bullion  and  foreign  exchange; 
and  is  compelled  by  the  act  of  1844  to  pay  £t,. 
i-js.  9d  per  ounce  for  gold  of  the  British  stand- 
ard (.9162/3  fine)  to  anyone  bringing  it  to  its 
ofiices ;  it  has  the  right  to  establish  branches, 
but  has,  in  fact,  only  eleven.  Its  loans  are 
chiefly  made  by  re-discounting  for  other  banks. 

The  gold-purchasing  function  is  important, 
since  the  money  supply  can  be  increased  only 
by  gaining  gold.  The  absolute  Mint  price  for 
the  metal  is  ;^3  17s.  10^  d.  per  oz.,  ordinarily  ex- 
pressed 77s.  lo^,  and  this  price  may  be  obtained 
bv  any  seller  of  gold  at  the  Mint  if  he  be  content 
to  await  his  turn  in  the  coining  process.     The 


Jllf' ; 


.j^^J 


:fy^i  1 


r- 


n 


llT 


)^-  .. 


difference  of  iM.  per  oz.  in  the  Bank  price  is  the 
charge  exacted  for  immediate  payment.  The 
Bank  may,  of  course,  pay  more,  and  frequently 
does.  Its  price  for  gold  is,  in  general,  indicative 
of  the  status  of  the  supply  and  demand  in  the 
world  at  large.  British  colonial  possessions  pro- 
duce the  greater  part  of  the  world's  annual  out- 
put of  gold ;  this  has  contributed  largely  toward 
making  London  the  primary  market  for  the  metal. 
There  is  no  legal  reserve  requirement  for  any 
of  the  banks.  As  the  reserve  depository  for  the 
other  British  banks,  the  Bank  endeavors  to  main- 
tain in  gold  and  notes  40  per  cent,  of  the  deposit 
liabilities  in  the  banking  department ;  when  the 
ratio  falls  below  that  figure  it  curtails  loans  by 
increasing  the  discount  rate ;  this  results  in  the 
pavment  of  e.xisting  loans  and  the  borrowing 
elsewhere,  which  tend  to  increase  the  coin  in 
hand.  Instead  of  raising  rates  the  Bank  may,  if 
conditions  favor,  increase  its  price  for  gold,  thus 
enabling  it  to  secure  the  new  supplies  arriving  in 
London,  or  drawing  it  from  such  other  money 
centers  as  show  a  lower  price  for  the  metal. 
Sometimes  both  these  devices  for  protecting  its 
reserves  are  employed. 

Upon  the  whole  this  seems  a  clumsy  and  ex- 
pensive method  of  increasing  the  money  supply ; 
for  it  is  obvious  that  the  higher  discount  rates 
and  the  premium  upon  gold,  must  be  paid  by 
those  who  are  at  the  time  compelled  to  borrow ; 
this  operates  as  a  tax  upon  trade  and  industry. 
Yet  the  British  appear  to  be,  in  general,  well  sat- 
isfied with  their  system. 

Below  are  given  statements  of  the  condition  of 
the  Bank  on  June  24,  1908,  at  which  time  its  dis- 
count rate  was  ih  per  cent. ;  in  the  open  market 
rates  were  below  i^  per  cent. ;  the  price  of  bar 
gold  was  77s.  loM.  the  oz.  It  will  be  seen  that 
the  report  of  the  banking  department  is  rather 
meagre  in  details. 

Issue  Depart.mext 
Notes  Issued  £s^'i'^^^S'^S 


Government  Debt 
Other  Securities 
Gold  Coin  and  Bullion 

Total 


;^II,Ol5,IOO 

7,434,900 
37)851,515 

;£56.30ioi5 


The  ratio  of  gold  to  notes  was  thus  fully  67  per 
cent.  It  is  to  be  observed  that  as  note  issues  in- 
crease the  ratio  of  gold  grows  larger,  since  the  ad- 
ditional issues  are  allowed  only  on  gold,  pound 
for  pound.     (The  £  is  S4.86§.) 

B.AXKING    DeP.ARTMEXT 

Capital  ;!Ci4,553,ooo 

Surplus  3'i67,653 

Public  Deposits  10,170,059 

Other  Deposits  46,167,208 

Other  Items  64,878 

Total  ;^74,i22,798 

Government  Securities  ;^i5)237,53i 

Other  Securities  and  Loans  30,023,299 

Bank  Notes  27,308,870 

Gold  and  Silver  Coin  1,553,098 

Total  £74,122,798 

The  Bank's  reserve  thus  stood  at  over  51  per 
cent. ;  this  is  reached  by  contrasting  the  notes 
and  coin  on  hand  with  the  total  of  the  two  classes 
of  deposits.  The  size  of  the  reserve  ratio  obvi- 
ously determined  the  low  discount  rate ;  in  fact, 
money  was  so  plentiful,  in  the  absence  of  active 
demand,  that  it  was  at  the  time  regarded  as  cer- 
tain that  the  Bank  would  soon  reduce  its  rate  to  a 
point  nearer  the  open  market  rate,  which  is  prac- 
tically regulated  by  the  other  banks. 

The  Bank  is  managed  by  a  board  of  twenty- 
four  directors,  who,  with  the  chief  officer  (gov- 
ernor) and  his  deputy  (not  directors),  are  all 
chosen  by  the  shareholders.  The  capital  stock 
is  divided  into  £100  shares.  The  voting  is  not 
bv  shares ;  no  shareholder  has  more  than  one 
vote,  no  matter  how  many  shares  he  may  hold ; 
but  no  voting  right  accrues  until  the  holder  has 
five  shares.  The  Government  thus  exercises 
onlv  a  very  limited  supervision  over  its  affairs. 

There  is  no  further  liability  upon  shareholders 
than  the  amount  of  their  stock.  Dividends  have 
been  paid  uninterruptedly ;  prior  to  1903  the  rate 
was  10  per  cent,  for  a  period  covering  fourteen 
years ;  since  then  it  has  been  9  per  cent.  The 
shares  are  quoted  at  about  290. 

The  Bank  pays  no  interest  upon  deposits; 
never  permits  an  overdraft ;  never  loans  on  real- 
estate  security  of  any  kind.     It  manages  the  pub- 


lie  debt  for  the  Government  (for  a  compensation), 
and  buys  and  sells  Government  securities  for  its 
customers ;  it  acts  as  the  settling  office  for  the 
London  Clearing-House.  It  never  reissues  a 
note,  no  matter  how  clean  and  crisp  it  may  be ; 
and  the  notes  are  printed  in  its  own  shop  in  the 
head  office  in  Threadneedle  Street. 

An  important  factor  in  the  British  banking 
system  is  the  branch-bank  feature.  While  the 
Bank  itself  has  only  eleven  branches,  the  other 
banks  in  England  and  Wales,  of  which  there  are 
68,  have  over  5,000  branches.  This  shows  great 
concentration  in  recent  years,  for  in  1896  there 
were  still  144  individual  banks;  many  of  them 
have  been  merged. 

The  Other  Banks 

We  must  now  consider  the  other  banks,  which 
in  fact  constitute  the  major  part  of  the  British 
system,  of  which  the  Bank  is  the  central  organ. 
There  are  two  classes  of  reporting  banks,  the 
joint-stock  (incorporated)  and  private;  (there 
are,  of  course,  many  private  bankers  who  do  not 
report) .  Two  of  the  private  banks  date  from  the 
17th  century;  they  are  gradually  being  merged 
or  incorporated,  yet  their  resources  at  last  report, 
early  in  1908,  amounted  to  over  ;;^3 2,000,000. 
In  the  following  table  the  joint  stock  banks  of 
the  country  are  included  with  those  of  London. 

Reports  are  published  twice  a  year  of  all  of 
these  banks,  and  some  furnish  more  frequent 
statements ;  only  a  very  few,  however,  report  the 
actual  cash  carried,  usually  including  the  sums 
held  at  bankers  and  often  money  "on  call "  ;  thus 
the  true  net  reserve  position  is  not  given.  In 
fact  the  cash  reserves  of  the  London  joint-stock 
banks  is  known  to  be  relatively  small,  which 
causes  an  added  burden  to  the  central  bank. 

Of  the  joint-stock  banks'  resources  ;^i 79,000,- 
000  are  to  be  credited  to  the  country  banks,  thus 


leaving  ;^6o3, 800,000  for  those  of  London  and 
making  the  banking  power  of  the  city  about 
;^73 2,600,000  or  approximately  $3,600,000,000. 
It  is  questionable  if  the  London  joint-stock  and 
private  banks  have  more  than  5  per  cent,  of 
actual  cash  reserves;  or,  say,  ;^27,ooo,ooo;  the 
Bank  had  ;^3o,746,ooo;  it  would  thus  appear 
that  the  cash  held  by  all  of  the  English  banks  was 
not  greater  than  ;^62,ooo,ooo,  or  less  than  9  per 
cent,  upon  the  deposits  reported.  J 

It  must  be  borne  in  mind  that  the  use  of  checks 
is  much  more  extensive  in  Great  Britain  than 
any^vhere  else  in  the  world ;  hence  actual  cur- 
rency (coin  and  notes)  is  not  required  in  such 
large  volume;  the  "deposit-currency"  is,  hence, 
the  important  feature,  and  adequate  coin  for  re- 
serves against  the  deposits  is  essential.  Obvi- 
ously the  bulk  of  the  business  is  done  by  the  joint- 
stock  banks,  and  owing  to  their  inadequate  pro- 
tection, they  fall  back  upon  the  Bank  in  periods 
of  pressure  for  discounts.  The  result  is  that  dis- 
count rates  are  not  nearly  as  stable  as  they  might 
be,  were  the  system  devised  to  provide  larger  re- 
serves and  greater  flexibility  to  note-issues. 

In  the  period  from  1888  to  1907  the  Bank's 
discount  rate  fluctuated  between  2  and  7  per 
cent.,  the  last-named  rate  having  been  compul- 
sorily  reached  by  the  Bank  during  the  panic  of 
1907,  when  the  imperative  demand  for  gold  from 
New  York  caused  a  depletion  of  the  Bank's  re- 
serves. This  maximum  rate  had  not  been 
quoted  since  1873,  when  similar  disturbances  in 
the  United  States  affected  London.  During  the 
twenty-year  period  named  the  changes  in  the  rate 
numbered  115  ;  in  only  one  year,  1895,  was  there 
no  change ;  the  2  per  cent,  rate  then  prevailing 
lasted  from  February,  1894,  to  September,  1896, 
the  period  of  abundant  banking  means  through- 
out the  world,  consequent  upon  the  greatly  di- 
minished demands  due  to  the  depression  in  busi- 
ness following  the  panic  of  1893.     During  the 


British  Banking  Power,  May,  1908  (In  Thousands  of  Pounds) 


Bank  of 

Other 

Total 

Scotch 

Total 

England 

loint  Stock 

Private 

English 

Irish,  etc. 

British 

Capital,  Surplus,  etc.     17,836 

85,558 

4,156 

107,550 

30,193 

137.743 

Deposits                          49)131 

648,596 

26,957 

724,684 

167,269 

891,953 

Net  Circulation              29,514 

353 

75 

29,942 

14,060 

44,002 

Other  Items                           81 

48,307 

1,050 

49.438 

7»37o 

56,808 

Totals 


96,562 


782,814 


32,238 


911,614 


218, 


1,130,506 


two  years  after  the  Baring  failure  (1890-91),  the 
changes  numbered  23;  in  1893  there  were  12 
changes;  in  most  of  the  years  since  1888  there 
were  6  or  more. 

Clearly  the  discount  rate  responds  to  condi- 
tions reflected  in  the  banking  status ;  the  supply 
of  metal  is  generally  not  so  large  that  a  loss  of 
$10,000,000  can  be  sustained  without  creating  a 
disturbance  in  the  credit  market.  The  point  to 
be  noted  is,  however,  that  the  increase  in  rates 
constitutes  a  tax  upon  business  and  the  insta- 
bility of  rates  is  very  undesirable.  If  fluctua- 
tions could  be  limited,  both  as  to  range  and  fre- 
quency, the  general  welfare  would  be  promoted. 
Serious  critics  in  London  have  for  years  urged 
that  the  joint-stock  bank  reserves  should  be  ma- 
terially increased,  as  a  partial  remedy  for  the 
evil. 
'^  A  concrete  illustration  of  the  operation  of  the 
Bank  is  afforded  by  the  record  made  during  the 
New  York  panic  of  1907.  Immediately  preced- 
ing the  crisis  (about  the  middle  of  October),  the 
Bank  held  over  49  per  cent,  of  reserves,  with 
8169.000,000  of  gold,  and  its  discount  rate  was 
4^  per  cent. ;  yet  it  was  bidding  for  gold,  having 
raised  the  price  for  the  yellow  metal  to  77s.  lofd., 
or  slightly  above  the  Mint  parity.  By  the  end  of 
the  month,  with  its  gold  reduced  by  $15,000,000, 
its  reserve  was  slightly  under  40  per  cent.,  the 
discount  rate  advancing  to  5J  per  cent.,  and  the 
bid  for  gold  was  78s.  In  the  first  week  of  No- 
vember 814,000,000  more  gold  left  the  Bank,  and 
the  reserve  fell  to  nearly  35  per  cent.,  which  was 
followed  by  a  double  rise  in  the  discount  rate, 
first  to  6  per  cent.,  then  to  7  per  cent. ;  the  price 
of  gold  was  raised  to  78s.  hd. 

This  latter  move  brought  gold  from  Germany, 
and  thus,  despite  some  shipments  to  New  York, 
the  reserve  was  increased  by  815.000,000.  In 
the  following  week,  by  means  of  friendly  nego- 
tiations, gold  was  obtained  from  France,  but  the 
demand  continued  and  the  $16,000,000  thus 
added  and  86,000.000  of  the  previous  stock  went 
out  of  the  Bank.  The  price  for  gold  fell  off  a 
little,  but  discounts  remained  at  7  per  cent.  Up 
to  this  time  the  Bank  had  not  decreased  its  loans  ; 
indeed,  from  October  17  to  November  7,  these 
had  grown  842,000,000,  but  clearly  subject  to 
higher  rates  imposed. 

Pressure  from  New  York  compelled  the  main- 


tenance of  higher  rates  both  for  discounts  and 
for  gold  for  the  remainder  of  November  and  the 
greater  part  of  December,  forcing  Germany  to 
give  up  more  of  its  yellow  metal ;  on  December 
12  the  Bank's  gold  stood  at  $166,000,000;  loans 
were  reduced  some  $23,000,000;  the  reserve 
reached  47  per  cent.  In  the  following  fortnight 
another  $17,000,000  of  gold  was  lost  to  New- 
York;  loans  expanded  by  $13,000,000,  leaving 
the  reserve  at  40  per  cent.  But  New  York  was 
by  this  time  satisfied;  the  price  of  gold  was  re- 
duced to  77s.  lod. 

In  Europe  banks  are  required  to  make  special 
arrangements  at  the  end  of  the  \^ear  to  provide 
for  the  annual  settlements ;  they  hence  expand 
loans  and  deposits  very  largely,  and  in  some  in- 
stances note-issues  as  well.  In  England  the  last- 
named  course  is  not  usually  followed.  With  an 
increase  of  $9,000,000  in  gold  in  the  last  week  of 
December,  and  the  demand  upon  it  abating,  the 
Bank  reduced  its  discount  rate  to  6  per  cent., 
swelled  its  loans  by  $39,000,000,  and  deposits 
even  more,  bringing  the  reserve  to  less  than  36 
per  cent.  The  price  for  gold  stood  at  77s.  q\d. 
(its  own  parity)  and  the  Bank  was  getting  all  the 
new  metal  coming  to  the  market. 

During  the  week  of  January  9  the  gold  stock 
was  back  to  8169,000,000,  the  extraordinary 
loans  were  repaid,  deposits  fell  848,000,000,  and 
the  reserve  ratio  rose  to  48  per  cent.  Still  out  of 
abundant  precaution  the  discount  rate  was  not 
reduced,  although  gold  bars  were  quoted  below 
the  Bank's  par.  In  the  following  two  weeks  the 
gold  gain  continued  and  the  discount  rate  was 
reduced  first  to  5  per  cent,  and  then  to  4  per  cent., 
for  the  reserves  were  placed  at  considerably 
above  50  per  cent. 

London  had  shipped  about  8100.000,000  of 
gold  to  New  York  ;  it  recouped  itself  by  drawing 
half  the  amount  from  Berlin,  obtaining  S16, 000,- 
000  from  Paris,  and  about  834,000,000  in  the 
open  market.  While  New  York  paid  a  heavy 
premium  for  gold  (probably  something  more  than 
3  per  cent.)  the  British  needs  were  not  supplied 
without  a  relatively  higher  interest  charge,  owing 
to  the  pressure  upon  the  Bank  ;  this  was  unques- 
tionably chargeable  to  the  fact  that  the  expansion 
of  money  and  credit  is  possible  only  through  the 
acquisition  of  gold.  During  a  period  of  financial 
disturbance  gold  is  in  universal  demand,  and 


therefore  more  costly ;  hence  a  system  resting  ex- 
clusively upon  gold  and  providing  inadequately 
for  reserves,  is  more  expensive  to  the  people. 

It  was  suggested,  during  the  1907  crisis,  that 
the  Government  again  come  to  the  Bank's  relief, 
by  suspending  the  restriction  upon  the  note-issue, 
permitting  an  expansion  by  means  of  credit  pa- 
per money.  But  this  step  was  not  taken,  prob- 
ably because  the  open  market  rate  for  money  (at 
the  other  banks),  continued  considerably  below 
the  Bank's  rate;  on  December  12,  for  example, 
it  was  51^  per  cent,  or  i|  per  cent,  below  the  "ofli- 
cial"  quotation;  indicating  that,  in  the  absence 
of  reserve  restraints,  the  joint-stock  banks  were 
expanding  local  credits  sufficiently  to  meet  de- 
mands. 

It  is  certain  that  this  most  recent  experience 
of  the  operation  of  the  system,  under  special 
pressure,  was  far  from  satisfactory  to  the  most 
enlightened  practical  bankers  in  England;  they 
have  publicly  voiced  the  opinions  that  there  is 
need  for  improvement,  particularly  to  obviate 
the  disturbances  resulting  from  the  operations  of 
the  heterogeneous  system  of  the  United  States. 

Other  British  Banking  Interests 

In  addition  to  the  Scotch  and  Irish  banks, 
discussed  below,  British  influence  is  extensively 
employed  in  banks  in  the  colonies  and  depend- 
encies of  the  empire :  India  and  other  Far  East- 
ern points.  South  Africa,  Australasia,  Canada 
and  minor  possessions  in  America.  The  sys- 
tems vary  to  render  them  adaptable  to  the  con- 
ditions in  each  case. 

The  colonial  banks  which  are  conducted 
largely  by  means  of  British  capital  are  specific- 
ally referred  to  elsewhere.  It  is  here  proper  to 
say  that  reports  of  thirty-one  of  these,  with 
about  2,200  branches,  show  £37,570,000  of 
capital  and  ;^357, 306,000  of  resources.  There 
are  also  banks  under  British  control  operating 
largely  in  foreign  countries ;  seventeen  of  these 
show  capital  about  ;^i 2,000,000  and  assets  fully 
;^i 25,000,000,  the  greater  part  being  employed 
in  South  America. 

The  ramifications  of  these  banks  and  their 
branches  bring  about  a  very  important  increase 
of  power  to  British  banking  resources  and 
hence  profits,  aiding  her  foreign  and  colonial 
trade  enormously. 


SCOTLAND 

has  a  unique  system  with  ten  banks  of  issue,  of 
which  the  Bank  0}  Scotland,  chartered  in  1695, 
is  the  chief  one.  The  note-issues  are  regulated 
by  a  law  of  1845,  practically  as  in  England;  a 
fixed  amount  (;^2,676,35o)  may  be  issued  upon 
securities ;  any  excess  must  be  backed  by  coin. 
Notes  may  be  of  denominations  as  low  as  ;^i. 
Actually,  however,  the  greater  part  of  business 
is  carried  on  by  means  of  bank  credits  (checks), 
which  system  is  more  highly  developed,  so  far 
as  the  general  population  is  concerned,  than 
elsewhere. 

The  banks  are  all  private  corporations ;  their 
capital  aggregates  £9,241,000.  There  are  nearly 
1,200  branches,  by  means  of  which  every  com- 
munity, no  matter  how  small,  is  within  easy 
reach  of  banking  facilities,  and  the  Scotch 
people  are  served  as  well  as  human  ingenuity 
can  devise.  An  important  feature  is  that  the 
notes  are  not  redeemable  at  the  branches. 

The  margin  of  note-issues  is  rarely  exhausted 
and  the  discount  rates,  only  slightly  affected  by 
the  fluctuations  in  London,  are  quite  steady  at 
4  per  cent. 

The  condition  of  the  banks  early  in  1908  was 
as  follows: 


Capital  and  Surplus 


£18,230,000 


Notes  7,410,000 

Deposits  and  Current  Accounts  108,723,000 

Acceptances  4,623,000 

Other  Items  2,065,000 


Total 

Cash  in  Hand,   at   Banks,   etc. 

Investments 

Discounts 

Advances 

Other  Items 


£141,051,000 

£26,973,000 
3i>9S3>ooo 
15,970,000 

57.o53>ooo 
9,102,000 


The  cash  in  hand  amounted  to  about£5,4oo,- 
000.  The  Bank  of  Scotland  had  fully  one- 
sixth  of  the  aggregate  resources.  The  reserves 
are  manifestly  not  large  in  ratio,  but  it  is  to  be 
remembered  that  Scotland  is  not  exposed  to  in- 
ternational demands  for  money. 


BANK  Ob  IRELAXU,  COLLEGE 

IRELAND 

Here,  too,  a  similar  system  prevails,  six  banks 
issuing  paper  money,  the  chief  one  being  the 
Bayik  oj  Ireland,  chartered  in  1783.  They  are 
private  corporations,  and  their  note-issuing 
powers  are  regulated  by  the  law  of  1845.  They 
may  issue  ;^6,3 54,494  of  notes  (as  low  as  £\), 
upon  securities ;  any  excess  must  be  covered  by 
coin.  The  check  system  is  less  prevalent  than 
in  other  parts  of  the  United  Kingdom.  Notes 
are  redeemable  at  the  branches. 

There  are  also  three  other  banks  of  discount 
and  the  aggregate  returns  of  all  of  them  show  as 
follows,  early  in  1908: 

Capital  and  Surplus  ;/^i  1,779,000 

Deposits  and  Current  x\ccounts         57,486,000 
Notes  6,582,000 

Other  Items  678,000 


GREEX,    UUBLIX,   IRELAND 

The  non-issue  banks  have  about  ;/^i  2,000,000 
of  the  resources ;  the  Bank  of  Ireland  has  fully 
one-fourth  of  the  aggregate.  The  actual  cash 
held  by  issue-banks  was  about  ^^3,600,000, 
showing  a  low  ratio  of  cash  reserves,  and  that 
one-half  of  the  notes  are  credit  issues;  but  the 
law  affords  a  large  margin  of  expansion.  The 
nine  banks  have  more  than  600  branches. 

Balance  sheet  of  the  Bank  oj  Ireland  for  June 
30,  1908: 

Capital  £2,769,230 

Rest  (Surplus)  1,034,000 

Undivided  Profits  i79> i33 

Notes  in  Circulation  2,594,548 

Public  Deposits  2,915,312 

Deposits  and  Current  Accounts        11,084,738 


Total 
Cash  on  Hand,  at  Banks,  etc. 
Investments 
Discounts 
Advances 
Other  Items 


/^ii, 528,000 
19,665,000 

6,178,000 
38,047,000 

1,107,000 


Total  ;^2o,576,96i 

Cash  on  hand  and  at  Bank  of  Eng- 
land £1,593.389 
Cash  at  Call  1,276,215 
Loans  and  Discounts  9,549,795 
Securities  8,041,49° 
Real  Estate,  etc.  116,072 


THE   REICHSBANK,   BERLIN 

The  Imperial  Bank  of  the  German  Empire 


The  German  Banking  System 

THE  IMPERIAL  BANK  OF  GERMANY 

(  DIE  REICHSBAXK  j 


The  Imperial  Bank  of  Germany  \vas  estab- 
lished soon  after  the  unification  of  the  Empire 
and  the  adoption  of  the  gold  standard:  it  was 
designed  with  the  purpose  of  assisting  Ger- 
many's industrial  and  commercial  develop- 
ment. Its  charter  dates  from  March  14,  1875; 
it  was,  however,  the  natural  successor  of  the 
old  Bank  of  Prussia,  which  had  been  in  exist- 
ence since  1765.  It  actually  began  business 
Januar}-  i,  1876.  Each  of  the  confederated 
states  then  had  its  own  banks,  with  note-issuing 
powers,  and  it  was  provided  that  as  these  sur- 
rendered their  rights  of  emission  they  accrvied 
to  the  central  institution.  Of  thirt}^-three  local 
banks  only  four  continue  at  this  time  to  issue 
notes,  one  in  each  of  the  following  named 
states:  Baden,  Bavaria,   Saxony.    Wurtemberg. 

The  Imperial  Bank  is  a  privately-owned 
stock  corporation:  the  management  is  arranged 
as  follows:  a  board  of  curators  of  Government 
officials,  with  the  Imperial  Chancellor  as  Chair- 
man, exercises  general  supervision:  a  board  of 
directors,  (including  the  President,)  appointed 
by  the  Emperor,  for  life,  have  the  immediate 
direction  of  the  business,  in  co-operation  with 
a  committee  chosen  by  the  shareholders. 
This  scheme  of  management  makes  it  practi- 
callv  a  Government  institution.  Shareholders' 
representatives  have  no  voice  in  its  policy. 

The  charter  is  now  given  for  ten-year  periods: 
it  expires  again  in  191 1.  The  Government 
reser\'es  the  right  to  acquire  all  the  shares  at 
"book-value  "  at  the  end  of  any  period,  in  lieu 
of  renewing  the  charter. 

The  capital  of  the  bank  is  180.000.000 
marks,  divided  into  1,000-mark  and  3.000-mark 
shares:  it  was  increased  from  the  original  sum 
of  120,000,000  marks,  to  150.000,000  marks 
in  1 90 1,  and  to  the  present  sum  in  1904. 

The  note-issuing  power  is  regulated  in  a 
unique  manner:  all  the  (5)  banks  are  permitted 
to  issue  notes  upon  credit  to  the  total  amount 
of  about  nine  marks  per  capita  of  population, 
which  sum  was  last  fixed  at  541,600,000  marks; 
in  addition  they  may  issue  to  the  amount  of 
gold,  silver,  treasury  notes  and  other  bank  notes 
held:  furthermore  notes  may  be  issued  upon 


credit  to  any  amount  called  for  by  business,  sub- 
ject to  payment  of  5^5'  tax  to  the  Government, 
calculated  weekly.  The  amount  of  the  untaxed 
credit  notes  allotted  to  the  Imperial  Bank 
is  472,829,000  marks,  or  say  5112,500,000. 
Thus  if  the  Bank  has  1,500,000,000  marks 
of  notes  in  circulation,  and  its  coin  and  other 
notes  in  reserve  amount  to  939,000.000  marks; 
it  will  have  561.000.000  marks  of  credit  notes, 
of  which  88,171,000  marks  would  be  subject 
to  the  tax.  Of  course  all  notes  not  covered 
bv  cash  must  be  covered  with  commercial 
paper  having  not  more  than  ninety  days  to 
nm:  and  at  least  one-third  of  the  "  cover '' 
must  be  in  cash. 

In  theory  the  tax  rate  infiuences  the  dis- 
count rate:  for  there  would  obviously  be  no 
profit  in  loaning  money  (notes)  at  4%%.  and 
paying  a  tax  upon  the  notes  of  5  %.  Yet  the 
Bank,  as  a  public  duty,  frequently  issues  taxed 
notes  when  its  discount  charge  is  less  than  the 
tax  rate,  in  order  to  accommodate  business 
demands. 

The  occasions  for  the  emission  of  taxed  notes 
come  usually  in  the  fall,  for  crop-moving,  and 
at  the  end  of  the  year,  when  annual  settlements 
are  made. 

Prior  to  1895  there  were  only  16  weeks  in 
which  taxed  notes  were  used;  subsequently, 
owing  to  the  expansion  of  business,  the  use 
was  much  more  frequent:  thus  in  i8g8  for  16 
weeks  and  in  1899  and  1900  for  20  weeks 
each:  since  then  the  occasions  have  again 
been  less  until  the  panic  period  of  1907.  The 
maximum  over-issue  was  626.000.000  marks 
at  the  end  of  December  1907. 

The  system  obviously  provides  for  greater 
flexibility  than  that  of  England,  but  not  as 
freely  as  that  of  France. 

The  bank  notes  are  not  legal  tender,  but  are 
accepted  ever)-where  in  the  Empire:  they  are 
now  issued  in  denomination  of  100  and  i.ooo 
marks  only. 

A  comparative  statement  of  the  Bank's 
condition,  to  illustrate  its  business,  follows, 
being  the  average  weekly  condition  for  1896 
and  the  actual  condition  on  Februar}-  17,  1908: 


OPEN    DEPOSIT   ROOM 


'^f< 


\ 


'^P'7S, 


IMPERIAL  BANK  OF  GERMANY 

(in    marks,    equal    to     23.8     CENTS 


Resources : 


1896 


Coin  and  Bullion*      891,988,000  928,219,000 

Treasury  Notes            22,235,000  74,089,000 

Notes  of  Other  Banks  11,083,000  28,749,000 

Loans  and  Discounts  752,333,000  1,039,188,000 

Securities                         6,959,000  38,433,000 

Other  Items                  50,218,000  110,087,000 

Fixed  sum  of  untaxed  credit  notes  permitted 
]SIargin  of  untaxed  notes 


Liabilities:                       1896  1908 

Capital                         120,000,000  180,000,000 

Surplus                           30,000,000  64,814,000 

Circulation                1,083,497,000  1,359,292,000 

Deposits                       484,259,000  531,471,000 

Other  Items                   17,060,000  83,188,000 

Totals                1,734,816,000  2,218,765,000 

293,400,000  472,829,000 

135,209,000  144,574,000 


*  Partly  silver,  as  explained  below. 


(To  estimate  amount  of  untaxed  notes  de- 
duct from  amount  of  circulation  the  totals  of 
coin,  bullion  and  other  notes,  then  find  the 
difference  between  the  result  and  the  fixed 
amount  of  credit  notes  given  above.) 

The  Treasury  notes  referred  to  are  irredeem- 
able Government  issues  based  upon  a  gold  "war- 
chest"  fund  held  in  the  fortress  at  Spandau ; 
they  amount  to  only  120,000,000  marks.  They 
are  legal  tender  for  all  purposes. 

The  taxing  feature  provides  elasticity  to  the 
volume  of  money,  since  there  is  no  limit  within, 
reasonable  demand,  that  cannot  be  supplied  at 
the  price  of  the  tax;  and  the  tax  operates  to 
limit  demand  and  to  cause  contraction  when 
proper  needs  have  been  met.  To  illustrate: 
in  the  statement  for  the  7th  of  February,  the 
amount  of  the  taxed  notes  shows  54,000,000 
marks,  so  that  the  contraction  in  the  ten  days 
intervening  (to  the  date  of  the  statement  for 
February  17,  1908,  given  above)  amounted  to 
about  198,000,000  marks.  From  December  11, 
.  1907,  to  the  end  of  that  month,  the  expansion 
had  been  431,000,000  marks;  during  the  month 
of  January  following,  the  reduction  of  taxed 
notes  amounted  to  588,000,000  marks  (say 
$140,000,000).  This  is  clearly  a  large  range  of 
expansion  and  contraction. 

The  use  of  checks  in  Germany,  while  greater 
than  in  France,  is  far  less  general  than  in  Great 
Britain  and  the  United  States.  (A  recent  law 
designed  to  extend  their  use  is  about  to  be  put 
into  operation.)     For  this  reason  the  Bank  is  par 


excellence  a  currency-issuing  institution.  Its 
deposits  aside  from  those  of  the  Government 
and  other  banks  are  not  very  large. 

The  details  of  the  reports  of  the  Bank  are  not 
very  full;  thus.  Government  deposits  are  not 
given  separately. 

The  Bank  is  permitted  to  carry  in  its  cash  a 
substantial  amount  of  silver  coin,  but  it  reports 
the  sum  only  at  the  end  of  each  year.  At  the 
end  of  1905  it  had  207,000,000  marks  out  of  a 
total  of  703,500,000  marks;  at  the  end  of  1907 
the  silver  was  206,600,000  marks  and  the  total 
coin  704,000,000.  This  shows  about  26  per 
cent,  silver  in  the  reserves,  a  circumstance  not 
generally  given  full  weight  in  the  discussions  of 
the  Bank's  condition.  Treasury  notes  and 
notes  of  the  four  other  banks  are  also  available 
for  reserve. 

The  Bank  has  its  principal  office  in  Berlin; 
branches  and  agencies  exist  in  every  section  of 
the  empire ;  in  all  there  are  about  four  hundred 
and  eighty  places  of  business,  at  some  of  which, 
howe\er,  only  certain  specific  lines  are  trans- 
acted. For  example,  notes  are  not  redeemable 
at  branches  unless  these  have  the  requisite  cash 
on  hand  to  spare. 

Dividends  may  be  paid  to  shareholders  up  to 
3^  per  cent.;  out  of  any  further  divisible  profits 
shareholders  may  have  one-fourth,  the  Govern- 
ment taking  three-fourths.  Thus  in  1905  there 
were  divided  25,406,000  marks,  of  which  the 
shareholders  received  11,076,600  marks,  giving 
them  a  little  more  than  6  per  cent.      In  1906 


they  received  8.2  per  cent.,  in  1907  nearly  9.9  per 
cent.  Thereare nearly i9,oooshareholders, giving 
an  average  holdingof  less  than  10,000  marks  each. 

An  extensive  and  most  useful  branch  of  the 
business  of  the  Bank  is  the  free  transfers  of 
funds  for  its  customers,  from  place  to  place  in 
the  Empire,  largely  by  means  of  book-credits ; 
domestic  exchange,  in  other  words.  The  sum 
handled  on  this  account  in  1907  was  over  130,- 
000,000,000  marks ;  this  shows  an  increase  of 
100  per  cent,  in  the  eight  years  ending  with  that 
year.  Of  the  gross  business  ("turnover")  of 
that  year,  reported  as  having  been  299,000,000- 
000  marks,  the  transfers  for  the  public,  counted 
upon  both  sides  of  the  ledgers,  obviously  con- 
stituted over  80  per  cent,  of  the  total. 

The  most  interesting  question  turns  upon  the 
discount  rate,  and  the  influence  thereupon  of  the 
unique  paper  currency  system.  In  general  the 
charge  is  higher  in  Germany  than  in  either 
England  or  France,  and  the  fluctuations  are 
much  more  numerous  than  in  France,  though 
not  nearly  as  frequent  as  in  England.  In  the 
twenty-year  period,  from  1888  to  1907,  the  rate 


ranged  between  3  and  7^  per  cent.,  the  latter 
being  the  maximum  in  its  record,  made  during 
the  panic  of  1907.  There  were  sixty-nine 
changes  in  the  period ;  in  only  two  of  the  years 
was  there  only  one  change,  the  average  number 
being  over  three  annually.  The  annual  average 
rate  fluctuated  between  3.12  and  6.03  per  cent., 
and  the  mean  rate  for  the  double  decade  was  4.06 
percent.  In  twelve  of  the  years  the  rate  reached 
or  exceeded  5per  cent., the  tax  limit.  Taxed  notes 
were  issued  in  each  of  these  twelve  years,  but 
also  in  the  remaining  eight  when  rates  were  lower. 

The  average  rate  for  1907  compared  with 
other  chief  centers  is  given  as  follows:  Berlin, 
6.03  per  cent. ;  London,  4.92  per  cent. ;  Paris, 
3.46  per  cent. ;  Brussels,  4.94  per  cent. ;  Amster- 
dam, 5.10  per  cent. 

The  Bank  reports  its  condition,  briefly,  four 
times  each  month  (not  weekly).  Reviewing  the 
periodical  statements  for  the  dates  antecedent 
to  the  panic  of  1907  and  subsequent  thereto,  we 
shall  have  a  pertinent  illustration  of  the  manner 
in  which  the  system  operates.  In  the  table  pre- 
sented the  statistics  are  given  in  millions  of  dollars : 


Reserves* 

Note 

Other 

Reserve 

Discount 

Taxed 

Issue 

Deposits 

Gold          Cash 

Loans 

Ratio! 

Rate 

Notes 

1907,  Oct. 

9 

407 

128 

129            72 

343 

37-6% 

5i% 

94 

IS 

380 

138 

133          79 

321 

40.9% 

5i% 

56 

23 

366 

143 

141            82 

309 

43-8% 

54% 

31 

31 

385 

131 

130          73 

338 

39-3%o 

6i% 

69 

Nov. 

8 

372 

134 

122            78 

?>Z^ 

39.5% 

7i% 

60 

15 

357 

131 

123         79 

319 

41-4% 

lh% 

42 

23 

343 

129 

124         So 

310 

43-2% 

1\% 

26 

30 

360 

116 

113         72 

330 

39-7% 

74% 

62 

Dec. 

7 

349 

113 

114         73 

315 

40.5% 

74% 

48 

14 

351 

129 

117         75 

320 

40.5%) 

74% 

46 

^3 

373 

134 

120         76 

341 

38-6% 

74% 

64 

31 

449 

157 

118        69 

442 

30-9% 

74% 

149 

1908,  Jan. 

7 

408 

125 

132         72 

351 

39-0% 

74% 

87 

15 

366 

136 

146         So 

302 

45-1% 

64% 

28 

23 

341 

136 

163         81 

271 

51-1% 

6  % 

none 

*  Gold  is  estimated  in  part.        t  Reserves  of  all  cash  against  notes 

The  reserve  ratio  is  calculated  upon  the  basis 
of  all  cash  against  the  notes  outstanding  and 
deposits ;  were  the  ratio  based  upon  gold  alone, 
it  would  obviously  be  much  smaller  at  each 
period,  since  the  Bank  held  $40,000,000  to  $47,- 
000,000  of  silver  continually,  and  this  coin  has 
only  a  limited  legal  tender  power.     The  Treas- 


and  deposits. 

ury  notes  and  notes  of  other  banks  held  in  the 
reserves,  approximately  $30,000,000  in  amount, 
were  not  to  be  reckoned  quite  equal  to  gold. 

The  increase  in  the  discount  rate  to  the  highest 
point  in  the  Bank's  record  was  obviously  due  to 
its  serious  loss  of  gold ;  while  it  became  possible 
at  the  high  price  offered  for  money,  to  recoup 


somewhat  from  Russia  and  other  points  on  the 
continent,  the  drain  to  London  for  New  York 
continued  so  long,  that  the  faUing  of  reserves 
could  not  be  checked.  In  all,  Germany  fur- 
nished $50,000,000  of  its  own  and  the  otherwise 
acquired  gold,  to  satisfy  the  New  York  demand, 
via  the  British  center. 

The  statements  indicate  that  discounts  were 
materially  checked,  at  a  period,  too,  when  they 
were  probably  needed ;  almost  at  the  climax  of 
the  movement  of  gold  outward,  the  amount  of 
taxed  notes  outstanding  reached  the  minimum 
for  the  period  (November  2t,).  In  practical  op- 
eration, under  this  severe  test,  the  taxed-note 
feature  clearly  failed  to  provide  means  for  relief; 
money  at  7J  per  cent,  at  the  Bank  and  at  7  per 
cent,  in  the  open  market,  did  not  in  that  week 
bring  into  use  the  expansion  of  notes.  It  is 
probable  that  the  pressing  needs  for  discounts 
were  largely  satisfied  by  other  banks. 

The  usual  annual  settlement  period  was,  how- 
ever, met  in  the  customary  manner ;  the  reserve 
was  permitted  to  decline  below  31  per  cent.,  and 
the  untaxed  notes  were  largely  increased  ;  loans 
expanded  more  than  $100,000,000  during  that 
last  week  of  the  year,  even  at  the  high  rate. 
Within  a  fortnight  thereafter  the  reserve  was 
speedily  replenished  and  the  discount  rate  began 
to  fall ;  the  taxed  notes  were  retired  and  there 
was  a  margin  of  $15,000,000  of  free  notes  issu- 
able, with  reserves  at  51  per  cent.,  on  January  23. 
Still  appreciating  its  weakness  the  Bank  held 
rates  high  to  attract  gold,  for  some  time  there- 
after. 

The  experiences  of  this  period  made  manifest 
that  the  system  is  not  perfect  in  operation.  Ger- 
many requires  ample  banking  facilities  and  these 
should  be  supplied  in  a  manner  which  obviates 
such  disturbances,  generated  by  the  defective 
system  in  the  United  States.  A  commission 
was  therefore  appointed  by  the  Government  to 
consider  the  subject  and  recommend  such 
changes  as  might  be  deemed  advisable.  No  re- 
port has,  as  yet,  been  published  of  the  action  of 
this  body,  which  began  its  sessions  in  May,  1908. 

The  data  given  indicate  insufficient  reserves 
for  a  central  bank  in  one  of  the  chief  commercial 
centers  of  the  world.  It  is  probable  that  this  de- 
fect could  be  remedied  by  providing  means  to 
gather  more  of  the  gold  in  the  countrv  into  re- 


serves;  for  Germany  has  the  largest  estimated 
amount  of  gold  in  actual  use  by  the  people,  partly 
because  no  notes  are  issued  below  100  marks. 
The  present  inactivity  in  money  should  also  en- 
able the  Bank  to  acquire  a  large  part  of  the 
world's  new  product.  Upon  the  other  hand,  it  is 
open  to  question  whether  the  Bank  could  succeed 
in  holding  the  metal,  under  its  present  system, 
upon  occasions  when  imperious  demands  arise. 
Yet  the  French  Bank  did  so. 

As  an  additional  protection  to  its  gold,  the 
Bank  makes  it  a  special  feature  of  its  business 
to  carry  a  considerable  amount  in  foreign  bills 
of  exchange,  which  can  manifestly  be  used  to 
remit  in  case  of  demands,  say  from  London; 
and  the  purchase  of  these  bills  is  so  arranged 
that  the  maturity  dates  are  graduated,  from  one 
to  six  weeks,  for  example.  In  times  of  ordinary 
demands  this  is  very  useful;  but  under  great 
pressure  for  actual  gold,  this  substitute  will  not 
suffice ;  a  postponement  of  the  remittance  of 
actual  metal,  in  such  circumstances,  merely 
compels  the  advance  of  discount  rates  (or  the 
price  offered  for  the  gold)  at  the  point  of 
demand. 

It  has  been  suggested  that  the  increase  in  the 
margin  of  untaxed  notes  would  be  an  improve- 
ment. There  is  some  merit  in  this  recommenda- 
tion, but  it  must  be  borne  in  mind  that  the  re- 
serves would  have  to  be  increased  proportion- 
ately. It  should  be  recorded  that  at  its  organi- 
zation the  untaxed  notes  allowed  amounted  to 
272,720,000  marks;  in  1890  the  sum  was  288,- 
025,000;  in  1900  it  was  still  only  293,400,000 
marks;  in  1901  a  material  increase  was  per- 
mitted, which  soon  reached  the  present  fixed 
sum  of  472,829,000  marks.  The  increase  in 
population  since  the  opening  of  the  century  has 
been  considerable;  and  since  the  allowance  is 
based  upon  population,  it  is  not  likely  that  there 
would  be  much  opposition  to  the  increase  of  the 
untaxed  notes  by  100,000,000  marks  at  this  time. 

It  is  proper  to  note  that  Germany  has  experi- 
enced an  enormous  expansion  of  bank  credits, 
not  unlike  that  which  took  place  in  the  United 
States.  Her  expanding  commerce  and  indus- 
tries have  been  served  in  a  fairly  satisfactory 
manner,  not  the  least  of  the  advantages  gained 
through  the  estabhshment  of  the  Bank  being  the 
uniformity  and  lower  general  range  of  discount 


rates  throughout  the  empire.  But  in  this  age  of 
intense  competition  and  diminution  of  the  profit 
margins,  it  is  imperative  that  the  fluctuations 
be  also  kept  within  more  reasonable  range. 
Rates  which  would  appear  moderate  in  the 
United  States  could  not  be  borne,  in  the  long 
run,  by  Germany's  industries,  operating  as  they 
are,  upon  a  lower  profit-margin  basis.  Hence 
the  7^  per  cent,  rate,  which  lasted  over  two 
months  at  the  end  of  1907,  was  a  most  serious 
handicap. 

In  the  discussion  of  the  taxed-credit-note 
system  of  bank  issues,  that  of  Germany  has  been 
the  example  most  prominently  before  us.  The 
merits  of  her  -fixed  rate  have  been  brought  into 
contrast  with  a  proposed  graduated  charge.  The 
theory  is  that  when  an  expansion  of  notes  is 
requisite  by  reason  of  normal  business  needs, 
the  tax  should  be  moderate  to  the  end  that  in- 
dustry be  not  burdened  too  heavily ;  but  that  the 
tax  should  be  increased  to  induce  a  contraction 
of  note-issues  when  the  demands  have  lessened. 
Such  an  increase  could  be  regulated  either  in 
accordance  with  the  amount  of  notes  issuable, 
or  in  the  measure  of  the  time  during  which  notes 
are  permitted  to  be  used,  progressing  weekly  or 
monthly. 

Such  a  provision  would  probably  be  desirable 
where  the  banks  themselves  determine  the 
volume  of  emissions ;  but  where,  as  in  Germany, 
the  Government,  through  its  oflacials,  controls 
the  volume,  it  is  questionable  if  the  graduated 
plan  would  prove  more  advantageous. 

The  Other  Banks 
The  other  banks  in  the  Empire,  which  are 
quite  numerous  and  include  several  verv  im- 


portant ones,  report  for  the  end  of  1907  a  large 
volume  of  means  and  business.  Their  capital 
is  over  $620,000,000,  and  the  aggregate  resources 
amount  to  $2,800,000,000.  Five  of  the  institu- 
tions carry  nearly  one-half  these  resources,  the 
Deutsche  Batik  heading  the  list  with  $445,000,- 
000.  These  banks  carry  the  large  deposit  ac- 
counts ;  they  rely  for  rediscounts  upon  the  Im- 
perial Bank  and  have  very  considerable  sums  on 
deposit  with  it  as  part  of  their  reserves ;  they  re- 
port about  $200,000,000  of  cash  in  hand  and  at 
banks  and  bankers.  Even  if  the  major  part  of 
this  sum  is  cash,  the  reserves  are  obviouslv  not 
large. 

Included  in  the  above  statement  are  those  of 
the  four  other  issue  banks;  they  have  72,000,000 
marks  of  capital  and  issue  about  148.000,000 
marks  of  notes;  they  had  81,000,000  marks  of 
cash  on  hand;  deposit  liabilities  are  placed  at 
66,000,000  marks.  They  are  authorized  to  issue 
68,771,000  marks  of  notes  on  credit  untaxed, 
paying  5  per  cent,  on  any  excess  issue  over  this 
sum  and  the  cash  on  hand. 

These  returns  indicate  a  banking  power  of 
commercial  banks  of  about  14,000,000,000 
marks,  or  approximately  $3,300,000,000,  or  less 
for  the  entire  country  than  that  of  the  city  of 
London  alone. 

Germany  provides  by  means  of  separate  insti- 
tutions for  mortgage  loans.  Seven  of  these  re- 
port over  3.400,000,000  marks  of  assets.  One  of 
them  dates  from  1835.  For  small  borrowers, 
chiefly  agricultural,  another  class  of  institutions 
exists. 

The  balance  sheet  of  the  Deutsche  Bank  for 
the  end  of  1907  follows  in  marks: 


Capital 

Surplus  Funds 
Deposits 

Current  Accounts 
Acceptances 
Other  Items 
Total 


200,000,000  Cash 

100,000,000  Due  from  Banks 

476,104,010  Securities,  Coupons,  etc. 

788,301,712  Bills  Discounted 

263,537,867  Advances  and  Current  Account; 

43,788,265  Syndicate  Interests 


1,871,731,854      Other  Items 


86,228,077 

56-959-955 

95,001,501 

786,395>2o5 

686,852,320 

I35.ooc^,o78 

25,294.718 


It  will  be  observed  that  the  cash  holdings  are 
not  very  large. 

For  the  rapidly  developing  foreign  business 


banks  have  been  established  to  operate  in  Asia,  in 
Brazil,  in  Chile  and  other  parts  of  South  America. 
Their   assets  are   fully  450.000,000  marks. 


The  French  Banking  System 


THE  BANK 

(LA   HANOI" E 

The  great  French  banking  institution  dates 
from  1800,  although  its  powers  respecting  note- 
issues  were  not  important  until  made  so  by  the 
law  of  1803  ;  Napoleon  I.  receives  the  credit 
for  its  creation.  The  charter  at  first  ran  to 
18 18,  then  to  1843,  then  renewed  in  1867,  and 
tinally  in  1897.  The  capital  originally  30,000, 
000  francs  was  increased  from  time  to  time, 
reaching  the  present  figure  182,500,000  francs 
in  1857;  shares  are  1,000  francs  each.  Not 
until  1848  did  the  actual  monopoly  of  note- 
issuing  center  in  the  Bank  ;  and  it  was  necessary 
in  order  to  acquire  this  power,  to  purchase  a 
number  of  other  banks  which  had  ancient 
privileges  to  emit  paper  money. 

The  stock  of  the  Bank  is  all  in  private  hands, 
but  the  Government  appoints  the  chief  official 
and  his  immediate  assistants ;  the  direction  is 
entrusted  to  a  "  general  council"  of  seventeen 
and  three  •'  censors,"  chosen  by  the  share- 
holders; but  the  chief  official  (governor)  has 
the  power  to  veto  the  council's  acts. 

Having  in  mind  that  France  has  changed 
its  form  of  government  many  times  since  the 
establishment  of  the  Bank,  the  fact  that  it  con- 
tinues to  exist,  more  useful  and  powerful  than 
ever,  is  a  tribute  to  the  wisdom  of  its  founders 
and  managers.     When    after    the  fall    of  the 


OF  FRANCE 

DE  FRANCE) 

second  F^mpire  the  communists  controlled 
Paris,  the  Bank  continued  doing  business 
although  it  was  compelled  to  suspend  coin  pa)-- 
ments  of  its  notes. 

The  provisions  of  law  governing  note-issues 
include  no  specific  restrictions  as  to  reserves; 
the  maximum  amount  of  notes  issuable  is  fixed 
by  law  and  has  been  increased  as  business 
needs  developed;  the  original  law  prescribes  that 
the  notes  "shall  be  so  proportioned  to  the  re- 
serve cash  in  the  vaults  of  the  Bank  and  with 
such  regard  for  the  maturing  of  negotiable 
paper  held  by  the  Bank,  that  the  Bank  can  at 
no  time  be  exposed  to  danger  of  delaying  pay- 
ment of  its  obligations  when  presented."  But 
it  is  to  be  said  that  France  is  a  bi-metallic 
country;  since  the  law  of  1803  both  gold  and 
silver  five-franc  pieces,  are  full  legal  tender ; 
hence  the  Bank  may  redeem  its  notes  in  either 
class  of  coin.     The  notes  are  a  legal  tender. 

The  discount  of  notes  and  bills  is  limited  to 
paper  containing  at  least  three  names,  and  in 
general  having  not  to  exceed  ninety  days  to  run; 
in  fact  the  bulk  of  the  business  consists  of  re- 
discounts for  other  banks. 

Following  are  comparative  statements  of  the 
condition  of  the  Bank  in  July  1S96  and  in  January 
1908,  showing  a  marked  growth  in  operations: 


BANK  OF  FRANCE— (In  francs  equal  to  19.3  cts.) 


Resources 


1896 


1908 


Gold 

2,050,000,000 

2,676,200,000 

Silver 

1,248,200,000 

917,500.000 

Loans  and  Discounts 

1,177,200,000 

2,345-5°o,ooo 

Securities 

212,600,000 

2 12,600,000 

Other  Items 

68,900,000 

198,000,000 

Totals, 

4,756,900,000 

6,349,800,000 

Liabilities 

1896 

1908 

Capital 

182,500,000 

182,500,000 

Surplus 

42,500,000 

42,500,000 

Circulation 

3,615,900.000 

5,066,900.000 

Government  Deposits 

203,800,000 

246,100,000 

Other  Deposits 

619,400,000 

581,100,000 

Other  Items                             1 

92,800,000 

230,700,000 

The  ratio  of  gold  to  notes,  in  1896,  was  fully 
56.7  per  cent.;  in  1908,  being  immediately  after 
the  drain  for  New  York  had  been  experienced, 
and  note-issues  had  reached  the  maximum,  it 
was  under  53  per  cent. ;  soon  after  the  opening 
of  1908  the  ratio  rose  to  nearly  60  per  cent.  It 
is  worth  noting  that  the  silver  holdings  were 
materially  l^wer  in  1908  than  in  1896. 

.\  glance  over  these  statements  illustrates  the 
difference  in  character  between  the  French  and 
the  British  systems ;  note-issuing  for  rediscounts 
is  the  chief  function  of  the  Bank  of  France ;  to 
that  end  expansion  of  circulation  is  freely  per- 
mitted, yet  the  coin  in  reserve  is  kept  large  in 
proportion.  It  is  true  that  deposits  in  other 
banks  are  more  important  than  those  in  the 
central  institution ;  but  in  the  aggregate  they  are 
far  less  than  those  in  Great  Britain. 

The  maximum  of  notes  issuable  is  now  5,800,- 
000,000  francs,  a  much  larger  amount  of  paper 
currency  than  is  permitted  anywhere  else;  but 
since  the  use  of  checks  in  France  is  exceedingly 
limited,  more  actual  money  is  requisite.  For 
example,  the  per  capita  supply  is  S41,  against 
about  $17  in  Great  Britain.  In  other  words, 
France  uses  very  little  "deposit  money." 

The  Bank  generally  does  not  find  it  necessary 
to  curtail  discounts  to  maintain  its  reserve, 
since  it  may  issue  notes  so  extensively  to  ac- 
complish the  purpose.  For  that  reason  the  dis- 
count rate  has  been  kept  low  and  remarkably 
steady.  Moreover,  in  order  to  protect  its  gold 
reserve  the  Bank  may  refuse  to  pay  gold  upon 
notes  ;  it  may  tender  silver  and  exact  a  premium 
for  gold  demanded  on  notes. 

To  show  how  largely  distributed  the  discount 
operations  of  the  Bank  are,  the  fact  may  be 
cited  that  in  one  year  over  19,000,000  pieces  of 
paper  were  discounted  and  rediscounted,  nearly 
half  of  which  consisted  of  paper  of  100  francs 
or  under ;  and  some  were  as  low  as  5  to  10  francs 
each  (say  Si  and  S2).  The  average  period  of 
maturity  of  the  paper  was  twenty-three  days. 
There  is  nothing  in  financial  history  to  com- 
pare with  this  in  the  way  of  public  service ;  and 
when  in  addition  it  is  borne  in  mind  that  rates 
for  discounts  are  usually  lower  than  in  other 
countries,  the  extent  of  the  benefit  to  the  people 
of  France  may  be  appreciated. 


The  marked  difference  between  the  constitu- 
tion, operation  and  condition  of  the  Bank  of 
France  and  of  that  of  England,  obviously  con- 
tributes largely  to  the  stability  of  the  discount 
rate.  It  has  seldom  happened  in  recent  years 
that  the  rate  had  to  be  raised  to  protect  reserves. 
Thus,  in  the  period  of  twenty  years  (1888  to 
1907)  there  have  been  only  sixteen  changes  in  the 
rate ;  in  twelve  of  the  years  there  was  no  change, 
and  there  was  no  change  whatsoever  from  May, 
1 900,  to  ^larch,  1 907 .  During  the  twenty  years, 
furthermore,  the  rate  rose  above  3  per  cent,  only 
during  three  periods  of  special  pressure  :  in  1888, 
when  it  reached  4^  per  cent.,  in  1899,  when  it 
reached  the  same  maximum,  and  in  1907,  when 
4  per  cent,  was  reached.  This  is  a  record  with- 
out a  parallel. 

The  rate  fell  below  3  per  cent,  on  a  number  of 
occasions:  in  1888  it  was  at  2^  per  cent,  for  a 
short  period ;  again  at  the  same  figure  from  1892 
to  1895,  falling  then  to  2  per  cent.,  at  which  it 
was  quoted  until  1898,  during  the  period  of 
world-W'ide  depression  in  business.  Since  the 
latter  year  it  never  went  below  3  per  cent.  This 
stability  is  obviously  another  great  benefit  to  the 
people  of  France.  Even  during  periods  of  dis- 
turbance elsewhere,  the  aberration  has  been 
either  absent  or  relatively  insignificant. 

There  is  in  Paris  also  an  "open  market"  rate 
for  loans,  almost  always  slightly  lower  than  the 
official  Bank  rate.  There  is  a  Bank  rate  for 
loans  upon  collateral  which,  it  is  noteworthy,  is 
slightly  higher  than  the  ordinary  rate. 

It  is  to  the  credit  of  the  management  that  con- 
sideration for  the  general  welfare  is  the  chief  mo- 
tive in  the  conduct  of  the  business ;  nor  is  this 
consideration  confined  solely  to  French  affairs; 
for,  appreciating  that  undue  disturbances  else- 
where would  ultimately  react  upon  her  own  peo- 
ple, the  Bank  is  also  conservative  in  its  inter- 
national relations.  Upon  three  occasions  has  it 
helped  out  the  London  money  market  when  in 
distress,  letting  it  have  gold  from  its  reserves. 

With  such  a  stock  of  metal  and  the  legal  power 
to  control  the  same,  it  follows  that  the  Bank  is 
sufficiently  strong  to  dominate  the  foreign  ex- 
changes, at  times  even  against  London.  It  has 
frequently  shifted  a  demand  for  gold  coming 
from  New  York,  bv  altering  the  price  of  the 


"Paris-London  cheque."  The  par  of  exchange 
upon  the  British  capital  is  25.22^  francs,  i.e.,  the 
exact  amount  required  to  equal  the  £.  By  de- 
pressing the  rate  sufficiently  to  cover  the  cost  of 
transfer  of  the  metal  and  leave  a  margin  for 
profit,  it  brings  about  a  flow  to  Paris. 

The  Bank  reports  its  condition  weekly ;  the 
head  office  is  in  Paris  and  it  operates  through  423 
branches  and  agencies.  Notes  are  now  issued 
only  in  denominations  of  50  francs  and  upward ; 
but  there  are  still  some  of  the  smaller  notes,  for- 
merly permitted,  unredeemed.  The  Bank  pays 
a  very  small  tax  to  the  Government,  regulated 


according  to  the  amount  of  the  "productive" 
circulation,  i.e.,  the  notes  not  covered  by  gold 
and  silver ;  in  amount  this  tax  is  about  7,000,000 
francs  annually.  Dividends  have  risen  from  13 
per  cent,  in  1905  and  prior  years  to  17^  per  cent, 
for  1907.  There  are  over  29,000  shareholders, 
so  that  the  average  holdings  are  less  than  7  shares. 
In  the  following  table  the  operations  of  the 
Bank  prior  to,  during  and  immediately  after,  the 
panic  of  1907  are  presented  to  illustrate  the  fa- 
cility with  which  it  adapts  itself  to  conditions. 
The  amounts  are  expressed  in  millions  0}  dollars; 
the  reserve  is  calculated  upon  notes  and  deposits: 


Note-issue 

Deposits 

Discounts 

Gold 

Silver 

Gold  Reserve 

Discount  Rate 

1907,  Oct. 

3 

948 

136 

358 

535 

185 

49-3% 

3i% 

10 

942 

130 

328 

534 

182 

49 

8% 

3i% 

17 

943 

137 

335 

534 

181 

49 

4% 

3i% 

24 

932 

139 

322 

537 

181 

50 

1% 

3i% 

31 

965 

155 

385 

538 

181 

48 

0% 

3i% 

Nov. 

/ 

959 

142 

350 

531 

180 

48 

3% 

3i% 

14 

943 

150 

355 

522 

180 

47 

9% 

4  % 

21 

930 

148 

339 

523 

180 

48 

5% 

4  % 

28 

930 

174 

359 

521 

180 

47 

4% 

4   % 

Dec. 

5 

947 

142 

355 

520 

179 

47 

8% 

4   % 

12 

928 

136 

339 

519 

179 

49 

0% 

4  % 

19 

928 

144 

348 

520 

179 

48 

6% 

4  % 

26 

927 

144 

346 

519 

179 

48 

5% 

4  % 

1908,  Jan. 

2 

968 

155 

416 

516 

176 

45 

9% 

4  % 

9 

962 

130 

377 

515 

176 

47 

1% 

3i% 

16 

963 

117 

361 

515 

176 

47 

7% 

3i% 

23 

943 

125 

345 

518 

176 

48 

5% 

3   % 

The  Bank  anticipated  disturbances  and  had, 
earlier  in  the  year,  placed  its  rate  slightly  above 
the  3  per  cent,  which  had  ruled  for  seven  years 
previous.  The  panic  came  in  New  York  on 
October  21.  In  the  last  week  of  that  month  the 
Bank  increased  its  discounts  $63,000,000,  in  part 
by  expanding  note-issues,  in  part  by  the  increase 
in  deposits.  It  was  early  in  November  that  the 
advance  of  $16,000,000  in  gold  was  made  to  the 
British  market,  and  on  the  14th  of  that  month 
the  Bank  was  constrained  to  raise  the  rate  to 
4  per  cent.,  in  view  of  the  falling  reserve  ratio. 

It  appears  as  if  the  management  regarded  48 
per  cent,  the  line  of  apprehension  respecting  gold 
reserves ;  this  is  very  high  against  both  notes  and 
deposits,  yet  the  policy  doubtless  serves  a  useful 
purpose  in  restraining  the  tendency  to  over  ex- 


pansion of  credits.  Actually  the  reserve  position 
is  much  stronger  than  is  shown,  since  the  silver  in 
the  Bank  is  also  available  for  the  purpose. 

Financing  the  end  of  the  year  needs  of  the 
country  for  settlements,  led  to  an  expansion  of 
discounts  by  $70,000,000  in  the  last  week  of 
1907,  of  which  fully  $41,000,000  was  accom- 
plished by  means  of  notes.  The  reserve  ratio  fell 
below  46  per  cent.,  but  the  Bank  can  always 
count  upon  a  speedy  repayment  of  loans  after 
New  Year's  Day ;  and  so  by  the  9th  of  January, 
deposit  liabilities  declining,  the  rate  was  reduced 
to  3^  per  cent,  and  fell  to  the  normal  point  two 
weeks  later,  when  the  reserve  was  48.5  per  cent. 

The  noteworthy  feature  is  that  the  two  expan- 
sion operations  mentioned  were  effected  without 


an  increase  of  specie  ;  indeed,  the  end  of  the  year 
operation  was  carried  through  with  a  declining 
coin  balance,  both  gold  and  silver  having  fallen 
off  83,000,000  each  during  the  operation.  Xor 
was  the  discount  rate  altered  in  the  periods.  The 
provision  for  elasticity  of  note-issues  is  clearly  en- 
titled to  credit  for  this  facility.  It  is  also  to  be 
noted  that  note-issues  contract  as  soon  as  needs 
abate;  thus,  there  is  no  vicious  piling  up  of 
means  by  which  the  discount  rate  is  inordinately 
depressed,  stimulating  speculation,  as  is  the  case 
in  the  United  States ;  in  fact,  as  before  stated, 
speculative  loans  are  charged  a  higher  rate  by  the 
Bank  than  the  ordinary  mercantile  borrowings. 
The  deposit  business  of  the  Bank  is  not  large, 
relatively ;  and,  as  the  statement  shows,  public 
moneys  constitute  a  very  substantial  part  of  the 
amount  held.  Yet  any  one  may  open  a  deposit 
account,  not  less  than  500  francs  in  amount ;  but 
the  Bank  pays  no  interest  and  therefore  the 
bulk  of  the  business  goes  to  other  institutions. 
Other  Baxks 

Of  these  latter  no  complete  official  returns  are 
available ;  yet  the  reports  lacking  are  those  of 
minor  institutions,  so  that  the  figures  which  we 
have  fairly  represent  the  banking  power  outside 
the  great  savings  banks.  The  capital  of  the  re- 
porting commercial  banks  is  given  at  930,000,- 
000  francs,  their  total  resources  at  6,865,000,000 
francs  ;  against  this  there  is  cash  on  hand  and  at 
the  Bank,  only  about  402,000,000  francs;  a 
rather  slender  reserve,  but  for  the  constantly 
available  power  to  rediscount  paper  at  the  Bank. 
To  show  the  concentration,  it  is  to  be  remarked 
that  three  great  institutions,  the  Credit  Lyonnais, 
the  Societt'  Gnierale  and  the  Comptoir  Xational 
d'Escompte,  have  fully  4, goo, 000,000  francs  of  the 
aggregate  resources.  These  have  about  1,200 
branches  and  agencies,  some  of  them  abroad. 

For  mortgage  loans  France  provides  one  great 
institution,  which  has  nearly  4,600,000,000  francs 
in  assets,  the  Credit  Fancier. 

French    Colonial  Banks 

In  her  growing  colonial  possessions  France  has 
established  banks  modeled  upon  the  lines  of  the 
great  Bank. 

Algeria  has  a  substantial  institution,  estab- 
lished in  1851,  with  25,000,000  francs  of  capital, 
which  does  a  large  business  in  Northern  Africa 


generally.     Its  condition,  given  in  francs,  is  as 
follows : 

Capital  and  Surplus  44,079,000 

Notes  142,428,000 

Government  Accounts  108,079,000 

Deposits  and  Current  Accounts  56,560,000 

Due  to  Branches  378,012,000 

Other  Items  5,725,000 

Total  734,883,000 


Cash 

Securities 

Loans  and  Discounts 

Current  accounts 

Due  from  Branches 

Other  Items 


44,020,000 

31,860,000 

182,778,000 

47,813,000 

382,672,000 

45,740,000 

This  shows  a  small  ratio  of  cash  against  notes. 

In  Tunis  there  is  a  bank  created  in  1906  with 
1,000,000  francs  capital  and  9,000,000  resources ; 
but  the  branch  of  the  Bank  of  Algiers  does  a 
larger  business. 

Morocco  has  a  French  bank,  with  capital  paid 
up  of  7,700,000  francs,  and  resources  23,580,000, 
established  in  1907.     It  issues  no  notes. 

For  Ixdo-Chixa  a  bank  was  organized  in  1875 
which  has  9,000,000  francs  of  paid-up  capital 
and  carries  resources  of  over  200,000,000  francs, 
of  which  cash  in  hand  and  at  banks  35,300,000. 
It  operates  throughout  the  Orient,  where  its  notes, 
amounting  to  nearly  53,000,000  francs,  circulate 
quite  freelv,  side  by  side  with  thoseof  other  banks. 

Reunion,  a  small  island  east  of  Africa,  has  a 
similar  bank  since  185 1 ;  with  3,000,000  francs 
of  capital,  its  aggregate  means  reach  nearly 
18,000,000;  it  uses  over  11,000,000  francs  of 
notes,  against  which  it  has  3,800,000  cash. 

For  the  other  African  possessions  there  is  a 
bank  with  home  office  in  Paris,  capitalized  at 
1,500,000  francs,  total  resources  about  14,000,- 
000.  It  uses  over  6,000,000  francs  of  notes  in 
Senegal,  Dahomey,  Guinea,  etc.  Cash  in  hand 
is  in  excess  of  5,000,000  francs. 

French  interests  also  extend  banking  facilities 
to  foreign  countries ;  thus  the  Imperial  Ottoman 
Bank  (mentioned  elsewhere)  is  partly  owned  by 
French ;  and  there  are  several  in  South  America, 
the  most  important  of  which  is  in -\rgentina,  capi- 
talized at  60,000,000  francs  gold  and  having  re- 
sources of  over  200,000,000  francs  gold. 


Austria-Hungary's  System 

THE  AUSTRO-HUNGARIAN   BANK 

(OESTERREICHISCH-UNGARISCHE  BAXKl 


The  Austro-Hungarian  Bank  became  the  suc- 
cessor, in  1878,  of  the  Austrian  National  Bank, 
founded  in  1816.  Its  special  importance  dates 
from  the  monetary  reform  of  the  Empire  in  1892, 
under  which  the  gold  standard  was  adopted, 
provision  made  for  the  retirement  of  Govern- 
ment notes,  and  the  paper  currency,  long  de- 
preciated, restored  to  parity.  The  money  unit 
was  then  changed  from  the  llorin  (or  gulden)  of 
48.2  cts.  to  the  krone  (crown)  of  20.26  cts.  It 
took  some  years  to  complete  the  reform,  and 
there  was  hence  a  slight  premium  on  gold  up  to 
a  few  years  ago.  The  services  of  the  Bank  were 
indispensable  to  the  consummation  of  this  re- 
form.    Its  charter  runs  to  19 10. 

Its  capital  is  210,000,000  kr.  and  its  resources 
aggregate  2,800,000,000  (or  say,  $567,000,000) ; 
nearly  2,000,000,000  kr.  are  held  against  note- 
issues,  the  deposits  beingrelatively  small.  The  cap- 
ital is  privately  owned,  but  the  emperor  appoints 
the  Bank's  governor;  the  two  deputies  and  half 
the  directors  are  also  Government  appointees, 
Austria  naming  part  of  them,  Hungary  the  other 
part.  In  addition  there  is  close  governmental  in- 
spection. Branches  exceed  250  in  number,  being 
located  at  every  important  place  in  the  Empire. 
The  head  offices  are  in  V'ienna  and  Buda-Pest. 

The  note-issuing  function  is  now  similar  to 
that  of  the  Imperial  Bank  of  Germany;  notes 


may  be  issued  in  excess  of  gold  reserves  to  the 
amount  of  470,000,000  kr.,  and  beyond  that  sum 
subject  to  a  5  per  cent.  tax.  The  gold  reserve 
must  be  not  less  than  40  per  cent.;  commercial 
paper  and  securities  cover  the  rest.  Thus,  if 
gold  in  hand  amounts  to  400,000,000  kr.,  notes 
may  be  emitted  to  1,000,000,000  kr.,  of  which 
600,000,000  kr.  upon  credit,  but  130,000,000 
thereof  must  pay  the  tax.  This  provides  for 
elasticity;  and  the  fact  that  the  tax  is  usually 
paid  during  crop-moving  periods  shows  wherein 
the  plan  is  useful.  The  notes  are  legal  tender 
and  are  not  yet  absolutely  redeemable  in  gold. 
More  than  half  the  issue  is  in  50,  20  and  10  kr. 

The  Bank  rediscounts  for  other  banks  freely; 
but  none  of  the  paper  may  run  for  more  than 
three  months.  Rates  for  money  are  fairly 
steady,  ranging  in  a  series  of  years  from  3 J  to  5 
per  cent. ;  during  our  panic  they  rose  to  6  per 
cent.  But  the  regard  for  the  general  welfare  is 
shown  by  the  fact  that  the  rates  are  often  under 
5  per  cent,  even  when  the  Bank  has  taxed  notes 
outstanding;  thus  the  tax  is  not  always  a  charge 
upon  business.  In  eighteen  years  taxed  notes 
were  issued  fifty-five  times,  in  amounts  ranging 
between  45,000  kr.  and  90,000,000  kr. 

The  Bank  is  authorized  to  loan  upon  mort- 
gages to  a  limited  amount.  A  balance-sheet 
for  December  31,  1907,  follows,  in  kronen: 


Capital  and  Surplus  225,305,349 

Notes  2,028,024,110 

Due  Abroad  177,316,676 

Mortgage  Bonds  292,671,800 
Deposits  and  Current  Accounts         91,383,971 

Other  Liabilities  31,290,269 

Total  2,845,992,175 


Coin  and  Bullion 

Gold  Abroad 

Discounts 

^lortgages 

Advances  on  Securities 

Government  Loan 

Other  Assets 


1,380.878,620 

60,000,000 
748,068,094 

299,993'S94 

125,340,400 

60,000,000 

171,711,167 


About  280,000,000  kr.  of  the  coin  consists  of 
silver,  which  has  only  a  limited  legal-tender 
power.  The  ratio  of  gold  to  notes  was  hence 
considerably  in  excess  of  50  per  cent. 

The  Government  shares  in  the  profits  of  the 
Bank,  receiving  one-half  the  excess  over  a  4 
per  cent,  dividend,  until   shareholders   have   6 


per  cent. ;  then  two-thirds  of  any  further  excess ; 
but  10  per  cent,  of  the  profits  must  go  to  surplus 
before  the  second  division.  Dividends  have  re- 
cently increased  from  about  4^  to  7  J  per  cent. 

Only  part  of  the  other  discount  banks'  re- 
ports are  available ;  these  show  capital  430,000,- 
000  kr.  and  resources  3,850,000,000  kr. 


Russia's  System 


THE  STATE  (IMPERIAL)   BANK  OF  RUSSIA 


I  G(JSU  D A  RSTW"  E  N  X  \]   HA  X  K  I 


The  Bank  of  Russia,  established  iS6o,  is 
owned  by  the  Empire,  and  is  operated  as  part  of 
its  finance  department.  The  capital  is  50,000.- 
000  rubles,  say  825,750,000.  The  gold  standard 
was  adopted  in  iSg;  with  a  ruble  of  51.5  cts., 
in  place  of  the  former  nominal  valuation  of  77.2 
cts.  Actually  under  the  old  silver  standard  the 
paper  currency  was  for  many  years  depreciated. 
By  means  of  large  bond-issues  the  Government 
accumulated  a  vast  hoard  of  gold  which  enabled 
the  Bank  to  carry  through  the  reform,  and  also 
to  finance  the  Empire  in  its  war  with  Japan. 
It  operates  through  about  100  branches,  the  head 
office  being  in  St.  Petersburg. 

While  the  Bank  is  thus  a  State  institution,  the 
note-issuing  function  is  regulated  by  law  founded 
upon  currency-banking  principles.  (For  Finland 
notes  are  issued  by  another  bank.)  The  normal 
limit  of  note-issues  is  300,000,000  rubles  in  ex- 


cess of  the  gold  on  hand ;  but  in  the  course  of 
financing  the  recent  enormous  outlays,  gold  held 
in  foreign  banks  has  also  been  included  as  base 
for  notes.  While  the  fixed  limit  would  appear  to 
preclude  a  large  measure  of  elasticity,  the  foreign 
balances  actually  help  out  very  materially  tc 
increase  notes  in  case  of  need.  The  notes  are 
legal  tender. 

From  the  accompanying  statement  of  condi- 
tion, it  will  be  seen  that  the  deposit  accounts  are 
relatively  larger  than  in  most  of  the  other 
central  banks;  but  rediscounts  are  quite  exten- 
sive. Discount  rates  range  higher  than  in  the 
other  chief  centers ;  co\ering  a  period  of  vears 
the  range  has  been  from  4 J  to  8  per  cent. ;  in  the 
panic  period  in  the  fall  of  1907  the  rate  rose 
to  -jh  per  cent.,  to  restrain  exports  of  gold  to 
Germany.  The  following  statement  of  condi- 
tion, in  rubles,  is  for  March,  1908: 


Capital  and  Surplus 
Notes 

Government  Account 
Deposits  and  Current  Accounts 
Accounts  of  Branches 
Other  Liabilities 
Total 


55,000,000 

1,160,000,000 

233^132.114 

416,112,126 

354.107,619 

33,812,678 

2,252,164,537 


Specie  on  Hand  and  Abroad  1,200,243,772 

Notes  on  Hand  77,512,496 

Discounts  219,378,576 

Advances  on  Securities,  etc.  261,345.698 

Investments  96,376,023 

Accounts  of  Branches  331,653,070 

Other  Assets  56,654,902 


Of  the  specie,  reports  indicate  that  the  Bank 
held  very  nearly  1,000,000,000  rubles  in  gold  and 
75,000,000  rubles  in  silver  in  its  vaults;  a  verv 
strong  reserve  position. 

Other  reporting  banks  show  about  1,800,000,- 
000  rubles  of  resources.    One  of  these  is  speciallv 

FINLAND 


designed  for  the  promotion  of  foreign  trade,  and 
one  particularly  for  the  business  with  China. 
Aside  from  these,  special  mortgage  banks  exist, 
one  class  for  the  nobility  and  one  class  for  the 
peasants. 


FiXLAXD  has  its  own  monetary  system,  the 
mark  equal  to  the  franc  being  the  unit ;  hence 
20  markka  are  worth  yk  rubles.  It  has  a  central 
bank,  established  in  181 1,  owned  l:)v  the  Govern- 
ment, capital  25,000.000  markka ;  note-issues 
are  limited  to  35,000,000  mk.  in  excess  of 
gold  in  hand  and  due  from  abroad,  the 
amount  in  hand  not  to  fall  below  20,000,- 
000    mk.     The    Bank's   statement  at   the  end 


of  March,  igoS,  shows  194.000,000  mk.  of 
resources. 

Notes  amounted  to  96,296,000  mk.  and  coin 
on  hand  to  24,971,000  mk.,with  over  50,000,000 
due  from  abroad.  This  showed  a  large  margin 
for  expansion. 

Discount  rates  are  fairly  steady,  although  high, 
ranging  from  5  to  6^  per  cent.  Other  banks 
report  resources  about  550,000,000  markka. 


THE     BANK    OF    JAPAN,    TOKYO 

Nippon  Ginko 


PUBLIC    OFFICE,     BANK    OF    JAPAN 


Japan's  System 


THE   BANK 

(XIPPUX 

When  Japan  emerged  from  her  isolation,  and 
adopted  some  of  the  business  methods  of  the 
western  world,  the  monetary  and  banking  sys- 
tem of  the  United  States  was  used  as  a  model 
for  her  own.  The  monetary  unit,  the  yen,  was 
almost  exactly  equal  to  the  dollar ;  the  Govern- 
ment issued  notes  directly,  and  also  through 
national  banks  upon  deposit  of  bond-security 
(1872).  An  experience  of  ten  years  sufiked  to 
demonstrate  the  great  defects  in  such  a  paper- 
money  system,  and,  always  prompt  to  adopt 
corrective  measures,  the  central  bank  system 
was  substituted  in  1882.  Since  that  date  the 
Bank  of  Japan  alone  may  issue  paper  currency. 

The  purpose  of  the  reform  was  to  provide  a 
greater  measure  of  elasticity  to  the  currency, 
hence  to  the  facilities  afforded  the  people ;  and 
the  consequent  reduction  in  the  discount  rates, 
which  were  pressing  upon  commerce  and  in- 
dustry. The  Bank  also  aided  very  materially 
in  the  consummation  of  the  change  to  the  gold 
standard  in  1897-8  ;  and  was  unquestionably  an 
indispensable  instrumentality  in  the  financing  of 
the  war  with  Pvussia. 

The-Bank's  capital  is  30,000,000  yen  (the  yen 


OF  JAPAN 

GIXKO) 

is  now  49.8  cts.) ;  the  Government  took  a  part 
thereof ;  it  appoints  the  chief  ofl&cers  and  selects 
the  directors  from  among  nominees  of  the  share- 
holders ;  it  has  the  power  of  vetoing  such  acts  of 
directors  as  may  be  regarded  detrimental  to  the 
interests  of  the  nation. 

The  Bank  acts  as  treasurer  of  the  Govern- 
ment and  handles  its  financial  operations ;  it  is 
the  rediscount  bank  for  all  other  financial  insti- 
tutions ;  it  is  especially  charged  with  the  regula- 
tion of  the  discount  rate,  and  exercises  an  in- 
fluence upon  the  foreign  exchanges.  It  may 
issue  notes  as  follows:  a.  to  any  amount  upon 
coin  in  bank  (silver  not  to  be  more  than  one- 
fourth) ;  b.  120,000,000  yen  upon  securities  or 
commercial  paper  discounted;  c.  to  a  further, 
unlimited  amount,  subject  to  a  tax  of  at  least 
5  per  cent,  per  annum. 

Thus  the  currency  feature  is  similar  to  that  of 
Germany's  great  bank ;  it  permits  a  very  liberal 
expansion,  which  proves  useful,  not  only  to 
business  in  general,  but  to  the  Government,  in 
case  of  emergency.  The  following  table  in- 
dicates how  the  demands  have  been  met, 
amounts  being  in  yen : 


Year 

Gold  on  Hand* 

Notes  Out 

Loans,  etc. 

Deposits 

1897 

96,900,000 

226,200,000 

135,200,000 

78,100,000 

1900 

65,300,000 

228,600,000 

146,000,000 

35,300,000 

1903 

116,900,000 

232,900,000 

94,500,000 

16,400,000 

1906 

147,200,000 

341,700,000 

137,600,000 

401,500,000 

1907 

161,700,000 

370,000,000 

157,900,000 

471,000,000 

*The  silver  held  was  unimportant  in  amount. 

It  will  be  observed  that  after  allowing  for  the 
credit-note  issue  of  120,000,000  yen,  the  amount 
of  taxed  notes  has  not  been  large  at  the  dates 
given;  but  during  certain  seasons  each  year 
there  are  substantial  increases.  The  general  re- 
sult has  been  a  lowering  of  discount  rates,  which 
would  unquestionably  have  been  more  marked 
but  for  the  financial  disturbances  consequent 
upon  the  war  with  Russia  and  the  enormous 
borrowing  which  that  struggle  entailed  upon  the 


nation.  As  it  is,  the  rates  have  been  reduced 
fullv  25  per  cent. ;  the  12  per  cent,  charge  is  no 
longer  normal  in  ordinary  times,  and  a  4^  per 
cent,  rate  has  occurred  upon  occasions  in  recent 
years.  The  fluctuations,  which  are  more  serious 
than  is  desirable,  are  generally  outside  the  trade 
centers  and  traceable  to  special  causes.  In  the 
centers  6  per  cent,  money  is,  in  normal  times, 
quite  frequent. 


The  coin  reserve  of  the  Bank,  measured 
against  notes,  has  been  fairly  well  maintained; 
in  1900,  and  again  in  1904,  it  fell  below  30  per 
cent. ;  but  it  has  been  above  40  per  cent,  in  the 
more  recent  years  and  the  latest  report  shows 
upward  of  50  per  cent. 

The  detailed  statement  of  the  "cover"  be- 
hind the  notes  on  Dec.  31,  1907,  is  given  thus: 


Gold  Coin 
Gold  Bullion 
Government  Obligation; 
Other  Securities 
Commercial  Bills 


29,098,000  yen 

132,644,000  '■ 

117,919,000  " 

23,333'°°°  ■' 

66,990,000  ' ' 

Total  369,984,000  " 

The  balance  sheet,  including  the  above,  for  the 
same  date,  follows,  in  ven  : 


Capital 
Surplus 
Notes  Issued 
Government  Deposits 
Deposits  and  Accounts 
Other  Liabilities 
Total 


30.000,000 

21,500,000 

369,984,000 

247,248,000 

224,048,000 

30,665,000 

923'445-ooo 


Coin  and  Bullion  172,312,000 

Foreign  Accounts  276,788,000 

Due  from  Banks  and  Agencies  205,338,000 

Loans  and  Discounts  178,528,000 

Government  Bonds  79,995,000 

Other  Resources  10,484,000 

Total  923,445,000 


The  Bank  pays  12  per  cent,  in  dividends  and 
adds  to  its  surplus  every  year.  The  head  otlice 
of  the  Bank  is  in  Tokio ;  it  has  branches  in  eight 
commercial  centers,  exclusive  of  Yokohama. 

Other  Banks 
Comprehensive  statistics  of  other  banks  are 
furnished  by  the  Government;  thus  1,665  ordi- 
nary commercial  banks  show  278,000,000  yen 
capital,  and  951,000,000  deposits  upon  a  "turn 
over-'  of  about  13,000,000,000  yen.  There  is  a 
special  mortgage  bank,  47  agricultural  and  in- 
dustrials, and  2  colonials,  with  an  aggregate 
capital  of  56,000,000  yen;  there  are  also  519 
savings  banks  (beside  the  Government  system). 

The  Yokohama  Specie  Bank  (Shokin  Giiiko) 
was  created  in  1880  specially  for  the  development 
of  the  foreign  trade.  Its  capital  has  been  in- 
creased, from  time  to  time,  from  3,000,000  yen 
to  24.000,000.  It  has  proved  enormously  use- 
ful, in  co-operation  with  the  central  bank,  in  its 
special  field.  It  has  branches  in  the  principal 
ports  of  Japan  and  the  rest  of  the  world.  It 
does  a  general  banking  business,  and  in  addition 
issues  notes  payable  in  silver  coin  in  Japan's 
newly  acquired  territory  in  Manchuria ;  its  for- 
eign exchange  business  is  very  large. 

At  the  end  of  1907  it  reported  its  condition, 
in  ven,  as  follows  : 


Capital  and  Surplus 

Notes  (in  Manchuria) 

Deposits 

Bills  Payable 

Cash 

Investments 

Loans  and  Discounts 

Bills  Receivable 


38,600,000 
6,071,000 

125,505-000 
128,203,000 

27,071,000 

16,531.000 

106,633,000 

146,757,000 


Total  resources  exceed  300,000,000  yen. 

This  bank  also  pays  12  per  cent,  dividends 
after  setting  aside  a  substantial  part  of  profits 
annually  for  surplus. 

Japan's  banking  system,  by  reason  of  its 
specialization  of  functions  into  the  several 
classes,  with  a  strong  Government  central  bank 
as  the  chief  organ,  has  proved  eminentlysuccess- 
ful.  The  aggregate  resources  of  the  banks  have  in- 
creased fourfold  in  the  past  decade  ;  the  ordinary 
banks  particularly  have  flourished  in  a  marked 
degree,  as  the  following  comparison  shows : 


Number  of  Banks 

Capital  Paid  Up 

Surplus 

Deposits 


1,281 

Yen 
161,442,000 
19,465,000 
235>507,000 


1907 

1,665 
Yen 
277,772.000 
78,478,000 

95I-7I3-000 


The  Canadian  System 


Although  the  Dominion  of  Canada  issues 
Government  legal-tender  notes,  the  amount 
thereof  is  limited  and  well  secured  by  coin; 
bank-notes  constitute  by  far  the  greater  part  of 
the  circulating  medium ;  in  fact  the  bulk  of  the 
Dominion  notes  is  held  in  the  reserves  of  the 
banks.  There  are  now  thirty-two  institutions 
of  issue  (three  having  recently  been  placed 
in  liquidation) ;  they  operate  through  i,8oo 
branches,  reaching  every  hamlet  in  the  country. 
The  Government  exercises  a  careful  and  ef- 
ficient supervision  over  the  system  and  the  banks 
co-operate ;  so  that,  although  there  have  been 
occasional  suspensions  of  banks,  the  common 
interest  prevented  losses  to  creditors,  and  notes 
have  always  been  fully  redeemed. 

The  present  bank  act  dates  from  1891 ;  it  per- 
mits the  banks  to  issue  notes  to  the  full  amount 
of  the  capital  paid  up,  solely  upon  their  credit, 
with  no  prescribed  coin  reserves ;  there  is,  how- 
ever, a  proviso  that  40  per  cent,  of  the  reserves 
which  they  do  hold  shall  be  in  Dominion  notes  ; 
and  the  notes  are  a  first  lien  upon  the  assets  of 
the  banks.  They  are,  furthermore,  required  to 
maintain  with  the  Government  a  guaranty  fund 
equal  to  5  per  cent,  of  their  issues.  This  fund 
is  to  be  used  by  the  Government  to  redeem  notes 
of  a  failing  bank,  to  be  replenished  pro  rata  by 
the  other  banks,  and  is  afterward  reimbursed 
from  the  sums  recovered  from  the  assets.  Notes 
of  failed  banks  bear  6  per  cent,  from  suspension 
until  provision  is  made  for  full  payment. 

Bank-notes  may  not  be  issued  for  less  than 
$5  and  only  for  multiples  of  S5.  (The  unit  is 
the  same  as  that  of  the  United  States,  whose 
gold  coin  as  well  as  British,  is  legal  tender.) 
Severe  penalties  are  imposed  for  excessive  issues 
of  notes.  Numerous  redemption  centers  are 
established  by  the  Government,  where  notes 
must  be  redeemed  on  demand,  subject  to  penalty 
of  insolvency  proceedings.  Upon  demand  of  the 
holder  banks  must  pay  up  to  Sioo  in  Dominion 
notes  (of  $1,  $2  or  $4)  upon  any  of  their  liabil- 
ities. Loans  upon,  or  purchases  of,  bank  stock 
or  mortgages  are  prohibited,  except  that 
mortgages  may  be  taken   for  pre-existing  debts. 


No  bank  may  be  established  with  less  than 
$500,000  capital.  Shareholders  are  liable  to 
an  amount  equal  to  the  par  of  their  shares. 
Monthly  reports  of  condition,  in  very  specific 
form,  are  required,  including  the  item  of  loans 
to  directors  or  to  firms  in  which  directors  are 
partners. 

Perhaps  nowhere  except  in  Scotland,  where  a 
similar  system  prevails,  is  the  function  of  cur- 
rency banking  so  well  performed  as  in  Canada ; 
the  demands  for  money  vary  seasonally,  de- 
termined largely  by  the  crops ;  and  the  volume 
of  notes  and  of  credits  increases  and  decreases 
in  almost  absolute  harmony  with  the  growth  or 
abatement  of  demands.  Hence,  the  discount 
rate  shows  very  narrow  fluctuations  and  is,  in 
general,  relatively  low;  nor  is  there  a  marked 
difference  between  the  rate  at  the  centers  and 
that  prevailing  at  remote  points  of  the  wide 
territory  of  the  Dominion. 

Elasticity  of  note-volume  is  brought  about 
largely  by  the  compulsory  redemption  feature, 
which  prompts  each  bank  to  send  notes  of  the 
others  for  redemption  at  once,  when  the  de- 
mands for  currency  slacken,  or  when  it  has  its 
own  notes  available  for  use.  Obviously  each 
institution  profits  more  through  the  use  of  its 
own  notes  than  from  the  use  of  those  of  other 
banks.  But  it  is  also  a  fact  that  when  the 
period  of  lessening  demand  sets  in,  the  banks 
voluntarily  retire  their  notes  as  they  come  in. 

Covering  a  series  of  years  the  discount  rate 
has  fluctuated  between  4^  per  cent,  and  6  per 
cent.,  the  lower  rate  named  having  prevailed 
steadily  during  a  period  when  the  facilities  had 
become  fully  equal  to  the  needs.  The  recent 
temporary  upward  turn,  again  to  the  high  point, 
was  due  largely  to  the  rapid  industrial  and 
commercial  development  with  which  the  in- 
crease in  facilities  did  not  keep  pace.  The 
capital  of  the  banks  is  the  chief  determining 
factor,  and  there  appears  to  have  been  need  for 
an  enlargement  thereof.  The  growth  in  this 
item  since  1890,  when  it  was  860.000,000,  has 
been  as  follows:  1895,' 862,000.000;  ^9oo?  S65.- 
200,000;  1905,  883.400,000;  190S,  893,000,000. 


Bank  of  Montreal 

Montreal.  Canada 


During  the  ])anic  in  the  United  States  in  1907, 
there  was  very  considerable  need  for  additional 
means,  which  the  banks  failed  to  meet  fully,  and 
the  Government  was  constrained  to  emit  an 
additional  supply  of  Dominion  notes — an 
extraordinary  proceeding.  This  incident  caused 
some  discussion  of  the  merits  of  the  system  and 
it  has  been  amended  so  that  the  note-issue  limit 
will  be  extended  to  reach  115  per  cent,  of  the 
capital  and  the  surplus,  during  the  period  of 
greatest  demand,  from  September  to  January. 
It  is  a  question  if  this  was  needed ;  the  fact  is  set 
forth  that  at  no  time  has  the  maximum  note- 


issue  reached  the  amount  of  the  capital;  in  the 
fall  of  1907  the  greatest  amount  of  notes  out 
was  about  $4,000,000  less  than  the  capital. 
Moreover,  it  is  suggested  by  Canadians  that 
the  banks  would  have  been  able  to  .serve  the 
public  better  had  they  loaned  less  of  their  means 
abroad,  meaning  chiefly  loans  in  New^  York  at 
call;  the  amount  of  "call  loans"  elsewhere  than 
in  Canada  in  September,  1907,  was  over  $63,- 
000,000 ;  in  November  the  sum  was  .still  in  excess 
of  $41,000,000. 

The  following  statement  shows  the  condition 
of  the  banks  on  June  30,  1908: 


Capital  Paid  Up  $96,049,000* 

Surplus  71,655,000 

Notes  68,154,000 

Deposits  on  Demand  226,671,000 

Deposits  at  Notice  399,286,000 

Government  Deposits  19,609,000 

Due  to  Banks  and  Branches  26,323,000 

Other  Items  6,701,000 

Excess  Assets  11,570,000 

Totals  $926,018,000 

*  Including  $3,000,000  of  one  bank  in  liquidation. 

It  is  noteworthy  that  time  deposits  are  very 
much  larger  than  other  deposits ;  also  that  the 
reserves  are  only  about  lo  per  cent,  upon  all 
deposits  and  notes,  but  upward  of  24  per  cent, 
upon  demand  deposits  and  notes. 

To  illustrate  the  fluctuation  of  note-issues  by 
years  at  end  of  months,  the  following  table  is 
presented,  figures  indicating  millions  of  dollars : 

Year 
1898 
1899 
1900 
1 901 
1902 
1903 
1904 

1905 
1906 
1907 


Maximum 

Minimum 

42 

35 

50 

37 

53 

41 

58 

45 

66 

49 

70 

55 

72 

57 

77 

58 

86 

62 

84 

68 

Range 

7 

13 
12 

13 
17 
15 
15 
19 
24 
16 


This  only  partially  reflects  the  movement, 
however ;  the  following  figures  show  the  changes 
in  a  period  of  eighteen  months  giving  highest 
amount  and  amount  at  end  of  month : 


Specie 

Dominion  Notes 

Five  Per  Cent.  Fund 

Bank  Notes  and  Checks 

Loans,  Ordinary 

Loans  on  Call 

Securities 

Due  from  Banks  and  Branches 

Other  Items 


$23,888,000 

50,804,000 

4,044,000 

27,431,000 

571,627,000 
93,907,000 
72,267,000 
54,085,000 
27,965,000 


Highest   End 


Month         Highest    End 

1907 

77     68         October  86    84 


Month 
1907 

January 

February  73     71         November       89     84 

^larch  77     76         December        86     78 

1908 
April  78     73         January  77     67 

May  76     71         February  70     69 

June  76     76         March  71     69 

July  78     73         April  72     68 

August  78     77         May  70     68 

September       81     79         June  70     68 

The  Bank  0}  Montreal,  established  181 7,  is  the 
oldest  and  the  chief  one  of  the  institutions,  hav- 
ing a  capital  of  $14,400,000  and  a  surplus  of 
$11,000,000 ;  its  total  resources  exceed  $177,000,- 
000 ;  thus  with  slightly  more  than  1 5  per  cent, 
of  the  capital  of  all  the  banks,  it  has  nearly  20 
per  cent,  of  the  aggregate  resources.  It  has 
125  branches,  including  three  in  the  United 
States,  one  in  ^Mexico,  one  in  London.  It  has 
for  many  years  limited  its  dividends  to  10  per 
cent.  Its  circulation  is  correspondingly  large, 
and  it  carries  by  far  the  largest  part  of  the 
Dominion's  public  funds,  being  the  Government 
depository  in  chief,  and  its  financial  agent. 


Italy 


(BAXCA   D'lTALIA) 


Italy  has  the  credit  of  having  established  the 
first  banks  in  Europe,  that  of  Venice  in  1 156  and 
that  of  Genoa  in  1345.  The  monetary  system 
passed  through  many  vicissitudes  even  after  the 
consolidation  of  the  numerous  petty  states  into 
the  present  kingdom.  The  Government  still 
issues  about  430,000,000  lire  of  legal  tender 
notes.  The  system  is  bi-metallic,  the  unit  lira, 
equal  to  19.3  cts.  The  Bank  of  Italy  is  since 
1893  the  central  organ  of  note-issues,  although 
the  Bank  of  Naples  (est.  1539)  and  that  of  Sicily, 
still  exercise  their  ancient  issue  functions;  they 
are,  however,  relatively  small.  The  chief  bank 
has  a  subscribed  capital  of  240,000,000  lire,  but 
only  180,000,000  thereof  paid  in. 

The  Banks  are  privately  owned,  but  the 
Government  exercises  supervision  over  all  three, 
but  by  means  of  direct  appointments  of  the  chief 
officers  only  in  the  two  smaller  ones. 

After  the  reorganization  of  1893  the  paper 
currency  continued  at  a  discount  for  some  time; 
banks  are  still  permitted  to  redeem  their  notes 
in  gold  at  the  current  rate  in  the  market;  occa- 
sionally unfavorable  exchanges  cause  a  slight 
premium  on  gold. 

Note-issues  are  regulated  as  follows : 

The  maximum  ordinary  issue  is  limited  to 
about  thrice  the  capital  of  the  banks,  against 
which  there  must  be  held  40  per  cent,  of  coin, 
three-fourths  of  which  must  be  gold.  The  notes 
not  covered  by  coin  are  subject  to  a  tax,  the  rate 


of  which  is  one-fifth  of  the  average  discount 
rate,  not,  however,  to  exceed  i  per  cent.  Further 
issues  are  permitted  on  actual  coin  received  and 
issues  on  credit  may  be  made  subject  to  a  tax 
graduated  according  to  the  amount  of  over- 
issues (not  covered  by  coin),  the  rate  varying 
from  two-thirds  of  the  discount  charge  up  to 
twice  the  charge.  Thus  the  amount  of  the 
issues  is  regulated  by  the  charges  made  to  bor- 
rowers, and  naturally  this  restrains  borrowing 
also,  since  the  tax  is  necessarily  added  to  the 
charge.  Yet  this  provides  amply  for  expansion 
in  case  of  need.  Thus  the  chief  bank,  having 
1,000,000,000  lire  in  coin,  could  lawfully  issue, 
subject  to  tax,  2,500,000,000  lire;  but  part  there- 
of would  be  taxed  fully  10  per  cent.  Actually 
the  issue  would  be  about  1,400,000,000  lire, 
whereof  770,000,000  fully  covered  by  coin 
and  630,000,000  (the  fixed  sum)  covered  to 
40,^*0;  only  378,000,000  lire  taxed  at  lowest 
rates.  In  1907  the  maximum  of  higher  taxed 
notes   amounted  to  less   than  49,000,000   lire. 

There  may  also  be  an  issue  for  the  Govern- 
ment's use,  on  which  only  Vi  coin  reserve  need 
be  held. 

Discount  rates  are  normally  about  5  per  cent. ; 
the  panic  conditions  in  1907  increased  the  rate 
to  only  5^  per  cent.  Obviously  the  rate  was 
maintained  fairly  steady  by  the  system  employed. 

Following  is  a  statement  of  the  Bank  of  Italy 
for  the  end  of  1907,  in  lire: 


Capital  and  Surplus 
Notes 

Public  Deposits 
Other  Deposits 
Other  Liabilities 
Total 


226,700,000 

1,411,600,000 

175,600,000 

212,300,000 

45,100,000 

2,071,300,000 


Gold 

Silver  and  other  Cash 

Loans 

Securities 

Current  Accounts 

Other  Resources 


896,300,000 

135,200,000 
618,900,000 
145,900,000 
64,300,000 
210,700,000 


It  appears  that  153,000,000  lire  of  the  coin 
held  belonged  to  the  Government.  The  two 
other  banks  had  440,000,000  lire  of  notes 
out,  and  252,000,000  lire  of  coin;  total  means 
761,000.000     lire.       Thus   with     1,851,600,000 


lire  of  notes  the  banks  held  1,121,700.000 
of  gold  and  150,600,000  of  silver  ;  a  coin  ratio 
of  nearly  69  per  cent.,  which  should  preclude 
depreciation  of  notes.  Other  commercial  banks 
reporting  show   1,600,000,000  lire  of  resources. 


hj 

(^ 

yj 

O) 

p 

i 

oi 

M 

M 

r\ 

ec 

§ 
D 

(S 

O 

i 

J 

o 

w 

Ti 

CQ 

Z 

fc 

3 

O 

C 

K 

i^ 

^ 

< 

M 

Belgium 


(BANQUE    XATIONAI 

This  populous  and  thriving  little  kingdom, 
largely  French  in  language,  has  the  French 
monetary  system  (bi-metallic)  and  a  National 
Bank  similar  in  its  constitution  to  its  great 
neighbor  in  Paris.  It  was  in  1850  that  the 
present  institution  took  the  place  of  a  multiple 
issue-bank  system,  which  had  produced  cur- 
rency difliculties.  In  iqoo  the  charter  was 
extended  to  1929.  The  Bank  is  privately 
owned,  but  the  Government  appoints  the  chief 
officers  and  thus  supervises  the  business.  It 
carries  the  Government  funds  and  serves  the 
fiscal  department  freely  whenever  required. 
Its  notes  are  legal  tender  so  long  as  they  are 
redeemed  in  coin. 

The  head  oflice  is  in  Brussels,  and  there  is  a 
branch  at  Antwerp ;  thirty-nine  agencies  afford 
facilities  at  every  point  of  the  kingdom. 

Its  capital  is  50,000,000  francs  and  the  re- 
sources aggregate  about  1,000,000,000  francs, 
the  greater  part  of  which  is  held  against  notes 
in  circulation,  deposits  being  relatively  small. 


K    DK    BELCiUIQUE) 

The  charter  requirement  contemplates  that 
the  coin  in  reserve  shall  equal  one-third  of  the 
notes  and  other  demand  obligations,  but  the 
Government  reserves  the  right  to  suspend  this 
regulation  if  the  Bank  has  an  abundance  of 
bills  of  exchange  commanding  immediate  gold 
or  a  sufficient  foreign  gold  account.  The  sus- 
pension of  the  requirement  is  quite  generally 
exercised,  for  the  coin  reserve  is  usually  con- 
siderably below  the  ratio  fixed ;  yet  the  notes 
are  at  parity,  for  the  Bank  is  strong  in  means 
for  speedy  liquidation.  This  credit  enables 
it  to  furnish  ample  currency  through  redis- 
counts. Notes  in  actual  circulation,  in  excess 
of  275,000,000  francs,  are  subject  to  a  tax 
of  i  per  cent.  In  addition  the  Government 
takes  one-fourth  of  the  net  profits  in  excess  of 
a  4  per  cent,  dividend  and  all  receipts  from 
discounts  in  e.xcess  of  2,1  per  cent.,  thus  en- 
deavoring to  regulate  the  interest  rate. 

The  following  balance-sheet  is  for  the  end  of 
1907,  in  francs  of  19.3  cts.  each: 


Capital  and  Surplus 
Notes 

Current  Accounts 
Government  Account 
Other  Liabilities 
Total 


84,968,110 

798,167,760 

93,614,248 

8,044,375 
16,995,617 

1,001,790,110 


Coin  and  Bullion 
Discounts 

Advances  on  Securities 
Investments 
Other  Resources 
Total 


133,261,800 

684,681,787 

61,716,731 

92,955,434 

29,174,358 

1,001,790,110 


The  silver  coin  held  frequently  rises  to  30,000,- 
000  francs.  The  ratio  of  coin  to  notes  was  less 
than  1 7  percent,  at  the  date  of  the  statement ;  the 
note-issues  were,  however,  as  usual  on  the  last 
day  of  the  year,  very  large.  In  May,  1908,  the 
notes  stood  at  727,000,000  francs;  gold,  125,- 
000,000 ;  silver,  3 1,000,000 ;  thus  giving  the  much 
better  coin  ratio  of  over  21  per  cent,  to  notes. 

Yet  the  ratio  of  gold  holdings  is  that  which 
attracts  attention ;  at  the  last-named  date  it  was 
only  a  trifle  above  17  per  cent.,  which  is  lower  than 
that  of  any  prominent  central  bank.  Depend- 
ence is  placed  upon  the  gold  subject  to  its  call  in 
Paris  and  London,  arising  from  the  large  com- 
mercialcredits  which  the  Bank  hasat  those  points, 
andupon  the  fact  that  two-thirds  of  the  notes  are 


of  small  denominations,  20,  50  and  100  francs. 
The  currency  system  would  thus  seem  less  secure, 
so  far  as  specific  reserves  go,  than  those  of  most  of 
the  leading  nations ;  and  this  is,  in  a  measure,  re- 
flected in  the  fluctuation  of  the  di.scount  rate ;  the 
range  has  been  from  3^  to  6  percent.,  the  latter 
rate  havingbeen  made  in  the  recent  panic  period. 
The  usual  rate  is,  however,  about  3^  per  cent. 

After  paying  the  Government  about  12,500,- 
000  francs,  8,300,000  francs  remained  for  divi- 
dends of  16.6  per  cent,  in  1907. 

Other  commercial  banks  do  a  very  extensive 
business  ;  the  resources  of  those  whose  reports  are 
available  aggregating  fufly  1,800,000,000  francs. 
There  are,  also,  several  important  private  bank- 
ing-houses, not  reporting. 


Spain 


(BANCO  DE  ESPANA) 


The  Bank  of  Spain  has  the  exclusive  power 
of  issuing  notes  in  that  kingdom.  It  dates  from 
1849,  although  it  was  not  granted  the  monopoly 
until  1874.  It  is  a  private  corporation  capital- 
ized at  150,000,000  pesetas  (equal  to  francs),  say 
$28,950,000.  While  the  shareholders  choose  a 
council  which  appoints  the  directors,  the  gov- 
ernor and  the  two  deputy  governors  are  appointed 
by  the  Government ;  the  deputies  are,  however, 
chosen  from  a  list  of  nominees  selected  by  the 
council.     Thus  there  is  joint  control. 

The  charter  of  1874  was  for  thirty  years  and 
permitted  note-issues  to  only  five  times  the 
capital ;  but  the  needs  of  the  Government,  which 
had  for  many  years  a  deficit  in  its  revenues, 
brought  about  an  enlargement  of  the  issuing 
power  in  1891  and  in  1901 ;  the  latter  due  to  the 
financial  derangement  consequent  upon  the  war 
with  the  United  States.  The  charter  was  re- 
newed and  extended  to  1921,  on  condition  that 
the  Bank  give  further  help  to  the  Government ; 
at  first  the  note-issuing  right  was  enlarged  to  ten 
times  the  capital,  one-third  of  the  issue  to  be 
covered  by  coin,  half  the  coin  to  be  gold.  (Spain 
is,  like  France,  bi-metallic,  and  its  large  silver 
coins  are  full  legal  tender.)  The  latest  extension 
respecting  notes  fixes  the  maximum  limit  of  issue 
at   2,000,000,000  pesetas,  regulated  as  follows: 

1,200,000,000  to  have  behind  it  one-third  in 
coin,  half  thereof  in  gold,  the  balance  to  be 
covered  by  commercial  paper  and  securities. 

300,000,000  pesetas  additional,  fully  covered 
by  metal,  40  per  cent,  thereof  in  gold. 

500,000,000  pesetas  further,  to  be  fully  covered 
by  metal,  half  thereof  in  gold. 


Capital  and  Surplus  170,000,000 

Notes  i,557>o8o>ooo 

Deposits  and  Current  Accounts  5iO'556,994 

Treasury  Accounts  149,864,131 

Other  Liabilities  384,025,206 


Thus  in  case  of  the  issue  of  the  maximum 
sum  the  Bank  would  have  to  have  against  the 
notes  1,200,000,000  pesetas  in  coin,  of  which 
570,000,000  in  gold. 

Actually  the  maximum  has  not  nearly  been 
reached;  but  a  very  considerable  part  of  the 
"cover"  for  the  notes  other  than  coin  is  in  the 
shape  of  Government  obligations.  Further- 
more, the  fact  that  so  much  of  the  coin  reserve 
is  in  silver  keeps  the  notes  at  a  discount.  Being 
full  legal  tender,  the  people  are  compelled  to  re- 
ceive them,  and  suffer  from  the  depreciation, 
which  exhibits  itself  also  in  the  foreign  ex- 
changes. The  people  practically  pay  in  this  way 
as  much  as  would  be  necessary  (or  more)  to 
cover  deficiencies  in  revenue  by  additional  taxes, 
and  re-establishing  parity  to  the  currency.  The 
Bank  has,  however,  grown  stronger,  and  the 
rate  of  the  premium  on  gold  has  declined  from 
30  per  cent,  to  about  15  per  cent. 

The  suspension  of  specie  payments  and  the 
power  of  expansion  have  enabled  the  Bank  to 
maintain  a  fairly  steady  discount  rate  at  4^  per 
cent. ;  there  was  no  increase  during  the  panic 
of  1907;  the  disturbance  then  was  confined  to 
the  exchange  rate. 

In  1895  the  Bank  had  out  987,000,000  pesetas 
in  notes,  holding  200,200,000  in  gold  and  256,- 
350,000  silver;  in  1908  the  notes  were  1,569,- 
000,000  pesetas,  gold  389,000,000  and  silver 
660,000,000.  The  latter  gives  a  ratio  of  66§  of 
coin  to  notes,  and  over  24  per  cent,  of  gold  alone. 
At  the  end  of  1907  the  balance  sheet  showed,  in 
pesetas  of  19.3  cents  each: 


Cash  and  Balances  Abroad 
Government  Bonds 
Loans  and  Advances 
Advances  to  Treasury 
Other  Assets 


1,095,345,802 
344,468,953 

1,152,042,578 

150,387,614 

30,181,384 


The  resources   are  thus    over   2,700,000,000  61    branches   and    agencies.     Its  shares  stand 

pesetas;    other    banks   reporting    show    about  at  440  per  cent.,   dividends   having  exceeded 

500,000,000      pesetas;      the      central     bank's  20   per  cent,  for  some   years.     The  head  office 

dominance    has   been    growing;    it    now    has  is  in  Madrid. 


BANK.    OF    THE     NETHERLANDS,    AMSTERDAM 

l)e  Nederlandsche  Rank 


BANK    OF    AMSTERDAM,    AMSTERDAM 
Amsterdamsche  Bank 


The  Netherlands 


(DE  NEDERLAN 

The  early  commercial  development  of  the 
Netherlands  led  to  the  use  of  banks  as  early  as 
1609,  when  the  Amsterdam  Bank  was  founded. 
Note-issuing,  as  now  carried  on,  dates,  however, 
from  the  establishment  of  the  Netherlands  Bank 
in  1814.  Its  monopoly  as  a  currency  bank  was 
received  in  1S63  ;  the  latest  renewal  of  charter 
was  given  in  1903  and  runs  to  1 918.  It  is  a 
privately  owned  and  managed  bank,  but  must 
divide  protits  with  the  Government  after  stock- 
holders receive  3^  per  cent,  dividends ;  yet  the 
dividends  have  been  from  8  to  13  per  cent,  in 
recent  years.  The  Government  exercises  care- 
ful, yet  mild,  supervision  over  its  affairs. 

The  country  is  bi-nietallic,  the  unit  (guilder  or 
florin)  being  40.2  cts. 


DSCHE  HANK  I 

The  head  otiice  of  the  Bank  is  at  Amsterdam  ; 
it  has  a  branch  at  Rotterdam  and  eighteen 
agencies.  The  Government  uses  the  offices  for 
the  Treasury  business. 

The  regulation  governing  note-issues  is  that 
the  Bank  must  have  in  hand  gold  and  silver 
equal  to  40  per  cent,  of  its  notes  and  other  de- 
mand liabilities  (deposits,  etc.).  The  expan- 
sion is  thus  dependent  upon  its  other  business; 
but  this  is  generally  small,  the  currency  func- 
tion being  the  chief  one.  Thus  the  reports 
usually  show  a  considerable  margin  of  power 
to  issue  notes  and  effect  rediscounts  for  the  other 
banking  interests. 

The  condition  of  the  Bank  in  March,  1908, 
showed,  in  florins,  thus : 


Capital 
Surplus 
Notes 

Current  Accounts, 
Total 


20,000,000      Coin  and  Bullion 


etc., 


5,031,908 

265,947,760 

12,681,627 

303,661,295 


Current  Accounts 
Loans  and  Discounts 
Investments 
Other  Resources 


146,058,314 

24,744.762 
121,071,728 

8,977.704 
2,808,787 


About  one-third  of  the  coin  and  bullion  con- 
sists of  silver,  which  is  full  legal  tender.  Calcu- 
lated upon  its  gold  reserve  alone,  the  ratio  would 
be  under  the  prescribed  40  per  cent.  Formerly, 
even  as  late  as  1899,  the  silver  in  the  Bank  far 
exceeded  the  gold ;  there  has  thus  been  a  material 
addition  to  the  reserve  strength. 

Discount  rates,  while  not  usually  high  (3J 
per  cent,  being  a  frequent  rate),  fluctuate  con- 
siderably at  times  of  pressure,  having  been  as 
high  as  6  per  cent,  in  1907,  for  which  year  the 
average  rate  was  5.1  per  cent. ;  for  1905,  on  the 
other  hand,  the  average  was  as  low  as  2f  per 
cent.  In  1907  the  6  per  cent,  rate  occurred  in 
April,  was  reduced  to  5  per  cent,  later  in  the 
month  and  remained  unchanged  during  the 
panic  period.  The  gold  reserve  actually  in- 
creased in  the  period. 

Other  reporting  banks  show  435,000,000 
florins  of  resources;  many  important  private 
banking  concerns,    not  reporting,  do  business. 


Colonial  Banks 

For  the  Dutch  East  Indies  the  Bank  of 
Java  was  established  in  1828,  as  a  currency 
and  rediscount  institution,  operating  upon 
much  the  same  lines  as  the  central  bank  in  the 
mother  country.  With  a  capital  of  6,000,000 
florins,  its  note-issues  run  as  high  as  65,000,000 
florins ;  total  resources,  78,000,000.  Coin  held 
was  nearly  31,000,000  florins,  hence  far  in  ex- 
cess of  the  40  per  cent,  requirement ;  deposits 
were  only  4,500,000.  It  is  located  at  Batavia 
and  has  fifteen  branches  and  agencies. 

Three  other  banks  v.Mth  Dutch  charters  do  the 
deposit  business;  their  resources  show  about 
220,000,000  florins,  upon  about  61,000.000 
capital.     One  of  these  dates  from  1824. 

In  Dutch  Guiana  the  Surinam  Bank  per- 
forms the  same  functions;  it  has  700,000  fl. 
capital,  3,800,000  resources,  of  which  962.000 
coin  against  1,324.000  notes  in  use. 

The  former  Dutch  (Boer)  republics  in  South 
Africa  had  also  been  provided  with  a  bank 
chartered  in  the  Netherlands. 


BANK   OF   SWEDEN,   STOCKHOLM 

Sveriges   Riksbank 


MAIN   BANKING    ROOM 
Sveriges    Riksbank 


Scandinavian  Union 


The  three  States  composing  this  union,  formed 
in  1S75,  are  Sweden,  Norway  and  Denmark 
The  gold  standard  was  then  adopted,  with  the 
krone  (crown),  equal  to  26.8  cts.,  as  the  unit. 
Each  has  a  central  bank  of  issue,  the  notes  of 
which  are  legal  tender. 

SVERIGES  RIKSBANK 

Sweden's  Royal  Bank  originated  in  1668  ;  it  is 
thus  next  to  the  oldest  existing  issue  bank.  Its 
capital  of  50,000,000  kr.  is  all  owned  by  the 
Government.  The  directors  are  elected  by  the 
parliament  and  the  governor  is  appointed  by  the 
king.     Its  chief  office  is  at  Stockholm. 

Until  the  end  of  1903  other  banks  were  also 
permitted  to  issue  notes  and  some  of  their  paper 
still  circulates  (about  39,000,000  kr.). 

The  limit  of  issue  is  governed  by  the  amount 
due  the  Bank  from  abroad,  hence  it  deals 
largelv  in  foreign  bills  of  exchange ;  the  gold  in 
hand  is  not  permitted  to  fall  below  60,000,000 
kr.  and  the  issues  beyond  this  and  the  amount 
held  abroad  must  be  covered  by  commercial 
paper.  Expansion  is  thus  dependent  upon 
business.  The  deposits  are  not  large  and  those 
held  are  chiefly  Government  funds.  Following 
is  a  statement  for  Dec.  31,  1907,  in  kronor: 

Capital,  Surplus  and  Profits  70,552,115 

Notes  190,115,534 

Deposits  61,139,290 

National  Debt  Account  48,459,819 

Due  Other  Banks  9,230,270 

Other  Liabilities  2,645,635 

Total  382,143,364 


Gold 

Silver,  etc. 

Due  from  Abroad 

Loans  and  Discounts 

Securities 

Other  Assets 


70.322,453 
8,210,467 

39,760,626 

255,231,031 

6,232,693 

2,386,093 

The  other  banks  are  important,  showing 
307,000,000  kr.  capital  and  2,100,000,000  kr. 
of  resources.  Discount  rates  are  high,  5  to  7 
per  cent,  being  the  recent  range. 


NORGES  BANK 

N0RW.A.Y  controls  its  central  bank,  the  Bank 
of  Norway  at  Christiania,  which  was  established 
in  1816,  now  capitalized  at  15,500,000  kr.  It 
owns  considerable  of  the  stock  and  the  manage- 
ment is  appointed  as  in  Sweden.  The  note- 
issues  may  not  exceed  twice  the  amount  of  gold 
in  hand  and  due  from  abroad ;  thus  here,  also, 
the  expansion  power  is  dependent  in  part  upon 
foreign  exchanges.  Its  deposits  are  not  im- 
portant ;  a  considerable  number  of  other  banks 
serve  the  commercial  interests,  with  resources  of 
about  550,000,000  kr. 

The  central  bank  shows  capital  and  surplus 
22,577,000  kr. ;  notes  issued,  83,450,000;  de- 
posits, 9,480,000 ;  total  liabilities  (and  resources), 
122,100,000  kr.  The  gold  in  hand  was  27,400,- 
000  kr. ;  due  from  abroad,  21,000,000,  and  notes 
on  hand,  10,000,000.  The  loans  and  discounts 
were  41,500,000  kr.,  securities  held,  10,000,000. 

Discount  rates  are  somewhat  lower  than  in 
Sweden,  5  to  6  per  cent,  being  the  usual  rate. 

DANSKE  NATIONAL  BANK 

Denmark  has  a  privately  owned  central  bank, 
founded  in  181S,  known  as  the  National  Bank, 
at  Copenhagen,  operated,  under  close  govern- 
mental supervision.  The  capital  is  27,000,000 
kr.  Notes  may  be  issued  to  the  extent  of  30,- 
000,000  kr.  on  credit,  covered  by  commercial 
paper ;  for  the  rest  there  must  be  gold  in  bank 
or  due  it  on  net  balance  from  other  banks.  This 
provision  operates  quite  satisfactorily  in  ordinary 
times,  discounts  being  frequently  at  4^  per  cent. ; 
the  usual  range  is  up  to  6  per  cent.,  but  during 
the  1907  panic  Germany  was  able  to  compel  the 
Bank  to  part  with  gold  and  rates  rose  to  8  per 
cent.,  seriously  restricting  discounts.  The  situa- 
tion is  not  yet  fully  normal.  With  121,000,000 
kr.  of  notes  out  the  Bank  held  only  67,000,000 
kr.  in  gold  in  bank  at  the  end  of  April,  1908. 
The  deposits  are  not  large;  the  total  liabilities, 
including  capital  and  surplus,  stand  at  about 
190,000,000  kr.  Other  banks  report  about 
700,000,000  kr.  of  resources. 


BANK    OF    NORWAY,   CHRISTIANIA 

Norges  Bank 


MAIN    BANKING     ROOM,    NORGES     BANK 


1'  -^^ 
UNIVERSITY 

OF 

Switzerland 

(SCHWEIZERISCHE  NATIOXAL  BANK) 

After  some  unfortunate  experiences  with  local  president,  elected  by  this  council,  must  be  of  the 
(cantonal  or  state)  banks  of  issue,  the  Federal  twenty-five  Government  appointees.  The  coun- 
Government  of  this  republic  assumed  the  regula-  cil  elects  three  directors  for  six  years,  who  have 
tion  of  the  currency  function  of  banks  in  1875.  the  direct  conduct  of  the  business.  The  note- 
There  were  until  recently  forty  banks  issuing  issuing  is  supervised  by  one  at  the  head  office 
notes  under  fairly  safe  restrictions,  but  they  also  in  Berne ;  the  other  business  is  centered  at  Zu- 
combined  savings  and  mortgage-loan  business,  rich,  where  the  two  others  are  located, 
and  were  cantonal,  not  federal,  corporations.  The  Bank  may  issue  notes  without  limit, 
Accordingly  the  Government  by  law  of  1905  provided  it  has  a  gold  reserve  of  40  per  cent,  and 
created  a  central  bank,  which  actually  began  commercial  paper  for  the  balance,  behind  them  ; 
business  in  June,  1907.  The  head  offices  are  in  its  other  demand  liabilities  must  be  covered  by 
Zurich  and  Berne,  and  there  are  seventeen  such  paper  also.  It  may  make  no  loans  or  dis- 
branches and  agencies,  which  are  being  increased  counts  to  run  more  than  three  months,  and 
to  reach  everyone  of  the  twenty-two  cantons,  paper  must  bear  two  names ;  stocks  are  not  per- 

Its  charter  is  for  twenty  years,  and  after  three  mitted  as  collateral,  and  bond  investments,  ex- 
years  it  will  have  the  monopoly  of  note-issuing,  cept  Government  issues,  may  be  only  temporary. 
The  other  banks  must  retire  their  notes  in  the  It  may  not  pay  interest  on  deposits,  except 
interval,  in  quarterly  installments,  the  National  Government  funds,  and  dividends  are  limited  to 
Bank  aiding  them  in  case  of  need  with  loans.  4  per  cent.     Of  the  profits  10  per  cent,  (not  to 

The  capital  is  50,000.000  francs,  but  only  half  exceed  500,000  francs  annually)  go  to  surplus 

thereof  need  be  paid  in  at  present ;  one-fifth  was  until  this  equals  30  per  cent,  of  capital ;  the  excess 

allotted  to  existing  issue  banks  in  proportion  to  over  4  per  cent,  dividends  then  goes   to  the 

their    note-issues ;    two-fifths    to    the    cantons  Government,  which  pays  two-thirds  of  it  to  the 

(states)  according  to  population ;  the  remaining  cantons  to  reimburse  them  for  loss  of  tax  on 

two-fifths  and  so  much  as  was  not  taken  under  notes  heretofore  in  use.     No  underwritings  are 

the  allotments,  might  be  taken  by  Swiss  citizens  permitted,  but  the  Bank  may  buy  bullion  and 

or    other    Swiss    corporations.      The   Federal  exchange  and  issue  gold  and  silver  certificates. 

Government  took  none.  The  Bank's  notes  are  not  legal  tender  except  in 

The   management   is   in  a  council  of  forty  payments  to  it  or  to  the  Treasury, 

members  who  are  chosen  for  one  year,  twenty-  Discount  rates  are  low  and  fairly  stable,  3  J  to 

five  of  whom  are  appointed  by  the  Government,  4^  per  cent,  being  usual ;  they  rose  to  55 per  cent. 

the   rest   by  shareholders,    no    private    share-  in  the  1907  panic.     The  country  is  bi-metallic. 

holder  having  more  than  100  votes,  irrespective  Following  is  a  statement  of  the  issue  banks 

of  shareholdings.      The    president    and    vice-  at  the  end  of  1907,  in  francs  of  19.3  cts. : 

National                      Other  National                     Other 

Capital                           25,000,000       231,700,000  Coin  and  Bullion         81,300,000        59,400,000 

Surplus                         48,500,000  Bank  Notes                     2,500,000        13,100,000 

Notes                            159,200,000      131,400,000  Loans  and  Discounts  108,300,000      881,500,000 

T)eposits  26,700,000      348,700,000      Mortgages  962,700,000 

Saxings  Deposits         383,000,000  Investments                    3,800,000       155,900,000 

Mortgage  Bonds         922,700,000  Other  Resources           18,800,000       ii3o°°»°°° 

Other  Liabilities            3,800,000       120,100,000  Totals              214,700,000   2,186,100,000 

The    National   Bank    held   about   6,000,000  There  are  a  number  of  banks  in  addition 

francs  in  silver  and  the  other  banks  2,000,000 ;  whose     assets    aggregate    about     500,000,000 

this  leaves  over  48  per  cent,  in  gold  to  the  notes,  francs. 


NATIONAL    BANK  OF    GREECE,    ATHENS,     (ETHNIKE    TRAPEZA) 

GREECE 


The  paper  currency  here  is  issued  by  the 
Government,  the  National  Bank  and  the  Ionian 
Bank.  The  National  is  by  far  the  chief  institu- 
tion, emitting  at  times  up  to  140,000,000 
drachmai  (equal  to  19.3  cts.)  of  notes;  the 
Government  has  80,000,000  out  and  the  other 
bank  less  than  4,000,000.  The  country  is  bi- 
metallic, but  as  there  is  very  little  coin  in  reserve 
(none  against  Government  notes)  the  money 
of  the  country  consists  of  depreciated  paper, 
fluctuating  in  recent  years  between  6  and 
16  per  cent. 


The  National  Bank  is  privately  owned,  capital 
20,000,000  drachmai,  upon  which  dividends  of 
from  17  to  19^  per  cent,  have  been  paid  in  recent 
years,  showing  a  very  profitable  business,  with 
a  wretched  money  system.  There  are  forty-two 
branches  in  the  several  sections  of  the  kingdom, 
the  head  ofiice  being  in  Athens. 

The  following  statement  of  the  National,  in 
drachmai,  is  for  Dec.  31,  1907.  Other  banks 
reporting  show  about  340,000,000  drachmai  of 
resources,  of  which  the  Ionian  has  about  50,000,- 
000,  the  Bank  of  Athens  about  170,000,000. 


Capital  and  Surplus 
Notes 

Deposits  and  Current  Accounts 
Lottery  Loan 
Saving  Deposits 
Government  Deposits 
Other  Liabilities 
Total 


33,500,000 

i37,5oo>ooo 

126,000,000 

66,300,000 

9,800,000 

17,900,000 

4,900,000 

395,900,000 


Coin 

Notes 

Accounts  Abroad 

Mortgage  Loans 

Government  Loans 

Other  Loans 

Investments 

Other  Resources 


3,300,000 
2,200,000 
33,900,000 
68,700,000 
74,300,000 
117,700,000 
69,700,000 
26,100,000 


The  coin  reserve    thus   figures  out  less  than 
2^     per    cent,    against    the    notes.       Discount 


rates  are  high,  but  fairly  steady,  at  6 J  per  cent. 
In  June,  1908,  the  gold  premium  stood  at  8^. 


■."TAra       ^        *-  1  alii 


BANK   OF   PORTUGAL,   LISBON   (BANCO    DE    PORTUGAL) 

PORTUGAL 


The  Bank  of  Portugal  is  the  successor  of  the 
old  Bank  of  Lisbon,  founded  in  1822 ;  the  re- 
organization took  place  in  1847,  but  it  was  not 
until  1891  that  the  Bank  was  given  the  sole 
right  to  issue  notes  for  a  period  of  forty  years. 
Its  capital,  13,500,000  milreis  (at  $1.08  equals 
$14,580,000)  is  privately  owned,  and  the  di- 
rectors are  chosen  by  the  shareholders ;  the  two 
chief  officers  are,  however,  appointed  by  the 
Government.  The  head  office  is  at  Lisbon; 
there  is  one  branch  and  nineteen  agencies. 

The  note-issuing  franchise  limits  the  amount 


of  the  issue  to  thrice  the  metallic  reserve  ;  but,  in 
fact,  conditions,  due  largely  to  Government 
financial  needs,  are  such  that  the  Bank  has  for 
years  been  permitted  to  put  out  notes  regardless 
of  this  restriction,  hence  they  are  depreciated, 
the  gold  premium  ranging  at  about  15  per  cent. 
The  notes  are  legal  tender. 

As  in  Spain,  the  circumstances  enable  the 
Bank  to  maintain  a  fairly  stable  discount  rate, 
5  to  6  per  cent,  and  to  pay  g^  per  cent,  dividends. 

The  Bank's  condition  at  the  end  of  1907  was, 
in  milreis,  as  follows: 


Capital 

Surplus  and  Profits 
Notes  Out,  net 

Deposits  and  Current  Accounts 
Other  Items 
Total 


13,500,000 
3,340,508 

70,967,000 
3,546,926 
6,321,359 

97,675,608 


Coin 

Loans  and  Discounts 
Investments 
Government  Debt 
Advance  to  Treasury 
Other  Items 


9,901,499 
30,116,829 

5,043,616 

21,634,542 

25,757,291 
5,221,831 


The  gold  held  is  only  about  half  the  total  coin, 
hence  the  reserve  is  about  7  per  cent. 


Other  corporate  banks  are  not  important ;  pri- 
vate banks  do  a  large  part  of  the  business. 


TURKEY 

Paper  money  is  not  used  extensively  in  the 
Ottoman  Empire  since  the  retirement  of  the 
greatly  depreciated  Government  notes  some 
years  ago.  The  Imperial  Ottoman  Bank  (es- 
tablished 1863),  an  institution  controlled  by 
British  and  French  interests,  has  the  right  to 
issue  notes,  but  the  amount  is  comparatively 
small,  and  its  coin  reserve,  consisting  chiefly  of 
gold,  is  usually  twice  the  amount  of  paper,  so 
that  the  notes  are  practically  gold  certificates, 
and  do  not  add  to  the  money  supply.  The 
statement  of  the  Bank  shows  for  March  31, 
1908,  resources  503,000,000  francs  ;  note  issues 
27,000,000  francs. 

Other  Turkish  banks  are  far  less  important; 
the  Imperial  has  over  fifty  branches,  the  chief 
office  being  in  Constantinople. 

SERVIA 

Here  the  National  Bank,  located  in  the 
capital  city,  Belgrade,  with  capital  20,000,000 
dinars  (or  francs),  has  the  sole  note-issuing 
power ;  the  country  is  bi-metallic  and  the  greater 
part  of  the  notes  is  based  upon  and  specifically 
payable  in  silver.  The  limit  of  issue  is,  as  in 
Roumania,  two  and  one-half  times  the  coin  in 
reserve ;  there  is  also  periodically  a  small  pre- 
mium upon  gold,  usually  late  in  the  year.  With 
about  33,000,000  dinars  of  notes,  probably  only 
10  per  cent,  payable  in  gold,  there  is  a  coin 
reserve  of  9,000,000  dinars  gold  and  8,000,000  of 
silver.  The  resources  total  about  60,000,000 
dinars.  Discount  rates  are  steady  at  about  6 
per  cent.     Other  banks  are  not  important. 

BULGARIA 

Bulgaria  has  also  a  National  Bank,  but  its 
capital  of  10,000,000  levs  (or  francs)  is  owned  by 
the  Government,  which  also  issues  notes;  but 
the  latter  are  fully  covered  by  coin,  while  those 
of  the  Bank  need  be  so  covered  to  only  40  per 
cent,  of  the  issue,  and  are  partly  payable  in  sil- 
ver. With  about  54,000,000  levs  in  notes,  the 
Bank  held  22,000,000  of  gold  and  18,000,000  in 
silver;  yet  gold  occasionally  goes  to  a  small 
premium  and  discount  rates  are  about  7  per 


cent,  steadily.  The  Bank's  resources  foot  up 
204,000,000  levs;  its  deposits  are  hence  quite 
considerable,  93,000,000  levs  aside  from  the 
public  deposits.     The  Bank  is  at  Sophia. 

EGYPT 

The  British  supremacy  in  the  land  of  the 
Khedive  has  resulted  in  the  use  of  paper  cur- 
rency issued  by  one  bank,  the  National,  which 
is  capitalized  at  ;^3, 000,000  and  has  a  surplus 
of  more  than  half  that  sum.  Its  resources  foot 
up  upward  of  ;^ii,ooo,ooo;  it  carries  about 
;^6, 000,000  of  deposits,  of  which  one-fourth  is 
for  the  Government.  The  note-issues  fluctuate 
considerably,  in  accordance  with  the  demand 
for  the  cotton  crop  movement.  The  total  oc- 
casionally exceeds  ;i^3,ooo,ooo,  but  falls  to  nearly 
;^2,ooo,ooo  in  the  slack  season.  The  statute  re- 
quires that  the  notes  be  covered  to  50  per  cent, 
by  coin,  the  remainder  by  securities  and  com- 
mercial paper.  The  Bank  has  its  head  office 
in  Cairo ;  Two  other  banks  under  British 
influence  have  about  ;{3"i 0,000, 000  of  resources; 
numerous  foreign  banks  have  agencies. 

PERSIA 

The  Imperial  Bank  of  Persia  is  a  British  in- 
stitution which  is  permitted  to  issue  notes,  con- 
stituting the  only  paper  currency  in  that  country. 
It  is  a  British  chartered  bank  with  a  sixty-year 
concession  from  the  Shah  of  Persia.  The  silver 
standard  prevails,  but  the  Bank's  reports  are 
rendered  in  pounds  sterling.  The  capital  is 
;^65o,ooo,  and  the  note-issues  ;4395700o;  de- 
posits, ^'550,000.  Although  only  about  one- 
half  the  total  resources  of  ;^2, 200,000  is  in  loans 
and  discounts,  the  Bank  does  a  profitable  busi- 
ness. The  cash  held  is  given  as  ;^387,ooo,  but 
the  requirement  as  to  notes  is  that  the  coin  need 
be  only  one-third  of  the  note-issues.  For  the 
privilege  accorded  the  Bank  the  Government  of 
Persia  is  entitled  to  6  per  cent,  of  the  profits, 
not,  however,  less  than  ;^4,ooo  annually.  Divi- 
dends are  a  little  in  excess  of  6  per  cent. ;  they 
have  been  at  about  that  figure  ever  since  the 
organization  in  1889.  The  head  office  is  in 
Teheran  and  there  are  10  branches. 


BANK   OF   ROUMANIA,   BUCHAREST   (BANCO   NATIONALA   A   ROMANIEl) 

ROUMANIA 


RouMAXiA  is  by  far  the  most  stable  of  the 
so-called  Balkan  states  from  the  point  of  view 
of  its  monetary  system.  It  has  now  the  gold 
standard,  and  established  a  central  bank  of 
issue  in  1880,  the  National  Bank  at  Bucharest, 
the  capital  city.  The  Government  took  one- 
third  of  the  capital  12,000,000  paid  in  (the  lei 
is  19.3  cts.) ;  it  appoints  one-third  of  the  directors. 

The  issue  power  is  regulated  by  the  gold  in 
reserve,  which  must  be  at  least  40  per  cent,  of 
the  amount  of  notes  out  at  all  times;  the  re- 


mainder may  be  covered  by  discounted  paper. 
The  notes  are  not  legal  tender,  but  are  receiv- 
able for  all  taxes,  and  are  usually  at  par;  the 
exception  being  when  in  certain  seasons  of  pres- 
sure gold  and  exchange  rise  to  a  premium  of 
I  to  i^  per  cent.  The  discount  rate  is  usually 
at  5  to  6  per  cent,  but  rose  to  8  per  cent,  dur- 
ing the   1907   panic  period. 

Other  reporting  banks,  show  about  250,- 
000,000  lei  of  resources.  The  Bank's  condi- 
tion at  end  of  1907  was,  in  lei: 


Capital 
Surplus 

Notes  in  Circulation 
Current  Accounts 
Other  Items 
Total 


12,000,000 

24,574,391 
271,005,760 

45,221,466 

7,087,375 

359,888,992 


Coin  on  hand 

Gold  Abroad 

Loans  and  Discounts 

Securities 

Current  Accounts 

Other  Items 


97,194,497 
39,384,681 
89,151,123 
31,085,055 
93,178,597 
9,895,039 


The  gold  held  was  thus  less  than  40  i:)er 
cent,  of  the  notes  out ;  but  the  Bank  may  count 
30  per  cent,  of  the  gold  held  abroad  as  part 
of  the  reserve.     The  Government  receives  one- 


fifth  of  the  profits  after  paying  a  6  per  cent, 
dividend  on  shares  and  setting  aside  20  per 
cent,  of  profits  to  surplus,  yet  the  shares 
earned  nearly  34  per  cent,  in  1907. 


BANK  OF  BENGAL.  CALCUTTA,  INDIA 


INDIA 


For  a  number  of  years  past  the  paper  cur- 
rency of  India  has  been  issued  by  the  Govern- 
ment. The  money  unit  is  the  rupee,  the  value 
of  which  is  arbitrarily  fixed  at  32.4  cts.  But  the 
strictly  Indian  banks  have  not  been  note-issuing 
institutions.  The  existing  ones  are  partly  con- 
trolled by  British  interests  directly  and  report 
their  business  in  pounds  sterling;  those  classi- 
fiable as  local  include  a  few  important  ones. 
All  of  them  operate  by  means  of  branches  to 
facilitate  business.      The  £  is  fifteen  rupees. 

The  Delhi  and  London  has  nearly  ;(^2, 000,000 
of  resources ;  the  Mercantile  has  over  ;^6,ooo,ooo, 
and  the  National,  with  ;^8oo,ooo  of  paid-up 
capital,  shows  aggregate  means  of  ;^i3,5co,ooo. 

The  greatest  of  the  Indian  banks  is  the  Bank 
of  Bengal,  at  Calcutta,  with  a  number  of 
branches.  Its  capital  is  20,000,000  rupees  and 
it  has  a  surplus  of  15,750,000.  Deposits  ag- 
gregate 176,000,000,  and  the  resources  total 
215,000,000  rupees.  It  carried,  at  the  end  of 
1907,  cash  to  the  amount  of  46,000,000— a  sub- 
stantial reserve  fund — and  had  nearly  28,000,000 
in  investments.     Among  its  loans  of  136,000,000 


rupees,  it  had  93,000,000  advanced  on  securi- 
ties. Dividends  have  been  10  to  12  per  cent, 
for  a  number  of  years.  The  Bank  was  estab- 
lished in  1809,  so  that  it  is  about  to  complete  a 
century  of  existence. 

The  Bank  oj  Madras,  with  6,000,000  rupees 
of  capital  and  3,600,000  of  surplus,  carries  a 
total  of  resources  of  55,500,000  rupees,  of  which 
16,000,000  in  cash. 

The  Indian  Specie  Bank  has  7,500,000  rupees 
capital;  it  was  organized  in  1906,  and  has  hence 
not  yet  a  large  business ;  its  resources  are  upward 
of  16,000,000. 

The  Bank  0}  Bombay,  an  important  concern, 
is  capitalized  at  10,000,000  rupees,  and  has 
9,600,000  of  surplus.  Deposits  are  over  93,- 
000,000  rupees,  of  which  1 1,000,000  are  Govern- 
ment funds.  The  total  resources  aggregate  over 
115,000,000  rupees,  inclusive  of  nearly  33,000- 
000  of  cash,  a  very  respectable  reserve  against  the 
deposits. 

Four  minor  banks  reporting  show  resources 
of  fully  105,000,000  rupees. 


HONGKONG     SHANGHAI     BANKING    C 

CHINA 

The  "celestial  empire"  has  neither  a  well- 
defined  coinage  nor  currency  system.  The 
standard  is  silver,  and  the  tael  (a  weight),  repre- 
sented by  a  small  bar  of  silver,  is  the  unit, 
equal  to  about  75  cts.  A  coinage  system 
w'as  adopted  some  years  ago,  but  not  put  into 
practical  operation  to  any  great  extent ;  a 
national  bank  was  recently  organized,  but 
has  not  progressed  far.  Notes  are  issued  by 
Chinese  bankers  and  by  British,  German,  Rus- 
sian and  Japanese  banks.  By  far  the  greatest 
of  these  is  the  Hongkong  and  Shanghai 
Banking  Corporation,  capitalized  at  15,000,000 
British  (silver)  dollars,  worth  about  50  cts. 
each;  it  has  a  surplus  of  25,000,000  and 
notes  15,700,000  dols.  Deposits  are  225,000,000, 
and  it  has  over  50,800,000  dols.  of  cash  on 
hand.  It  does  business  throughout  the 
Orient,  and  has  agencies  in  the  chief  commer- 
cial ports  of  the  world  where  Asiatic  trade  is 
heavy.  Its  resources  total  about  300,000,000 
dols. 


ORPORATION  (HONGKONG,  CHINA) 

The  Russo-Chinese  Bank  has  resources  about 
160,000,000  rubles;  the  German  Asiatic  about 
35,500,000  taels. 

The  Chartered  Bank  of  India,  Australia  and 
China  also  does  business  here,  as  its  name  im- 
plies. Its  capital  is  £800,000 ;  surplus,  ;^i,ooo,- 
000 ;  note-issues  about  ;/^5oo,ooo  and  all  assets 
about  £18,000,000. 

PHILIPPINES 

The  old  Spanish  Filipino  Batik  continues  to 
do  business  here,  under  the  supervision  of  the 
new  Government  established  by  the  United 
States.  Its  capital  is  1,500,000  pesos  ($750,000), 
and  surplus  900,000  pesos.  Circulating  notes 
in  use  do  not  exceed  1,200,000  pesos;  included 
in  its  resources  of  nearly  10,000,000  pesos  it  had 
about  1,450,000  of  cash. 

The  Hongkong  and  the  Chartered  Bank  also 
do  a  large  business,  employing  about  20,000,000 
pesos  of  means.  A  New  York  institution,  the 
International  Banking  C or poration, w'xih.  a  cap- 
ital of  $3,250,000,  carries  on  operations  of 
nearly  10,000,000  pesos. 


BANK    OF    NEW    SOUTH    WALES 

SvaiK-v,  Au>tT-ali,i 


GENERAL     BANKING    ROOM,    BANK    OF    NEW    SOUTH     WALES 


BANK    OF    AUSTRALASIA,     MELBOURNE,    AUSTRALIA 


AUSTRALASIA 


Australia  and  Xew  Zealand  have  twenty-two 
banks  of  issue,  some  with  British  charters.  But, 
as  in  Africa,  the  use  of  gold  is  so  prevalent  that 
note-issues  are  not  important  in  volume.  The 
British  pound  is  the  standard  of  value  at  84.865. 
Treated  in  the  aggregate,  their  paid-up  capital  is 
about  £17,000,000,  surplus  and  profits  ;^8,ooo,- 
000;  notes  are  less  than  ;^5, 500,000,  deposits  in 
excess  of  £1 50,000,000.  Of  the  ;/! 2 00, 000, 000  of 
total  resources  cash,  chiefly  gold,  amounts  to 
nearly  £45.000,000,  or  nearly  30  per  cent,  re- 
serves against  deposits  and  notes.  Compared 
with  population  this  means  a  remarkably 
strong  banking  position. 

The  Bank  of  Xen'  South  Wales,  organized  in 
1817,  with  some  250  branches,  is  the  chief  insti- 
tution, capital  £2,500,000  and  surplus  £1,530,- 
000;  it  has  over  £26,000,000  of  deposits  and 
only  £982,000  of  notes  out ;  cash  is  reported  at 
£6,869,000 ;  the  loans  and  discounts  are  in  excess 


of  £23,000,000 ;  total  resources  over  £34,000,000, 
or  more  than  one-sixth  of  the  total  means  of  all 
the  banks.  It  has  paid  10  per  cent,  divi- 
dends regularly  for  many  years;  the  iJ^2o 
shares,  all  fully  paid  up,  are   quoted  at  £42. 

The  Bank  of  Australasia,  Melbourne,  dates 
from  1S35;  its  resources  exceed  £22,500,000,  of 
which  nearly  £17,000,000  in  loans,  £3,750,000 
cash.  The  capital  is  £1,600,000  and  the  sur- 
plus £1,470,000;  notes  £505,000.  It  has 
about  170  branches.  Dividends  were  raised 
from  II  per  cent,  to  14  per  cent,  recently. 

The  National  Bank  0}  Australasia,  also  at 
Melbourne,  has  £10,200,000  of  resources,  of 
which  £7,000,000  is  in  loans  and  discounts, 
£1,650,000  cash;  note-issues  are  £256,800. 
This  bank  was  organized  in  1858,  and  part  of 
its  capital  is  in  preferred  shares.  It  has  about 
150  branches  and  pays  5  per  cent,  in 
dividends. 


note- issues,  something  like  the  national  banks  in 
the  United  States 

The  most  important  of  the  six  banks  reporting' 
is  the  Standard,  organized  1862,  which  has 
nearly  half  the  total  resources,  its  statement 
showing  £26,171,000.  This  business  is  done 
upon  a  capital  of  ;^i, 548,000,  surplus  £1,900,- 
000.  Its  subscribed  capital  is,  however,  £6,194,- 
100,  the  unpaid  three-fourths  being  shareholders' 
liability.  Dividends  are  at  14  to  16  per  cent., 
and  the  shares  (£25  paid  up)  stand  at  £67,. 
There  are  about   150  branches    and    agencies. 

The  Bd?ik  of  Africa^  established  1879,  with 
£1,000,000  paid  up  capital  £500,000  surplus, 
and  over  £6,000,000  of  deposits,  has  only 
£210,000  of  notes  out,  and  nearly  £9,000,000 
of  total  resources.  There  are  about  75 
branches. 

There  is  a  substantial  bank  at  Mauritius  with 
£450,000  of  means,  and  one  in  Nigeria  carrying 
£120,000 ;  for  Sierra  Leone  and  the  vicinity  there 
is  one  with  over  £1,000,000. 


HEAD   OFFICE    OF   THE   BANK    OF    AFRICA 

Cape  Town 


BRITISH  AFRICA 

The  British  colonial  possessions  in  South 
Africa  have  a  number  of  banks  which  issue 
notes,  but  there  is  no  great  demand  for  paper 
currency  in  this  section  of  the  world,  which  is 
the  greatest  of  its  gold  producers.  In  all  there 
is  only  about  £1,700,000  of  paper  in  use,  and 
the  banks  hold  several  times  that  amount 
in  gold.  The  unit  is  the  British  pound 
equal  to  $4.86f . 

The  following  shows  the  general  situation  of 
the  banks: 

Their  capital  aggregates  £4,800,000  and  the 
surplus  £3,000,000;  their  aggregate  resources 
amount  to  £53,800,000;  the  cash  reported  is 
about  £7,000,000. 

Their  business  extends  throughout  the  low- 
er part  of  Africa  and  the  islands  adjacent;  in 
addition  to  a  large  number  of  branches  there, 
they  have  a  few  in  Europe. 

The  banks  in  Cape  Colony  proper  deposit 
securities  with  the  Government  to  cover  their 


THE     BANK    OF    AFRICA 

Johannesburg 


Mexico 


Like  several  other  countries,  Mexico  has  a 
multiple  bank  system  for  issuing  notes ;  yet  the 
National  Bank  is  preeminently  the  central 
organ  and  dominates  with  a  certain  measure  of 
support  from  the  Government.  The  present 
system  may  be  said  to  date  from  1896,  when 
revisory  federal  laws  were  passed,  which  sepa- 
rated banks  into  classes.  The  adoption  of  the 
gold  standard  in  1905  (with  a  silver  currency) 
served  to  strengthen  it.  Under  this  the  peso  or 
unit  was  made  equal  to  49.8  cts. ;  prior  thereto 
the  standard  was  silver  and  the  peso  fluctuated 
in  value ;  at  one  time  (prior  to  1875)  the  old  peso 
was  worth  $1,016. 

Banks  of  issue  are  chartered  for  thirty  years ; 
they  are  required  to  have  at  least  500,000  pesos 
capital,  and  must  deposit  in  the  Treasury,  or 
with  the  National  Bank,  one-fifth  of  the  capital 
with  which  they  begin  business,  in  Government 
bonds.  The  note-issues  are  limited  to  thrice 
the  capital  in  any  event ;  and  cash  reserves  must 
equal  one-half  the  note-issues  and  deposits  pay- 
able on  demand.  No  notes  under  5  pesos  are 
permitted.  Notes  are  not  legal  tender.  They 
are  a  first  lien  upon  the  assets,  and  are  redeem- 
able only  at  the  place  of  issue. 

State  lines  are  rather  closely  drawn ;  no  bank 


may  without  Federal  Government  sanction  have 
branches  in  other  States;  the  first  bank  estab- 
lished in  each  State  is  exempt  from  federal 
taxes;  others  must  pay  in  addition  to  general 
taxes  a  2  per  cent,  capital  tax  annually. 

There  is  a  Government  official  attached  to 
each  bank  who  has  a  supervision  over  the  busi- 
ness in  general  and  countersigns  the  notes. 
^Monthly  reports  of  condition  are  required. 
There  must  be  set  aside  annually  at  least  10  per 
cent,  of  the  profits  to  surplus  account.  Dis- 
counting of  paper  is  limited  to  two-name  bills 
running  less  than  six  months,  unless  secured  by 
collateral.     Mortgage  loans  are  prohibited. 

Should  the  note-issue  of  a  bank  exceed  the 
limit  of  reserves,  no  further  loans  may  be  made ; 
and  if  the  excess  is  not  retired  within  forty-five 
days  the  bank  may  be  subjected  to  enforced 
liquidation. 

Special  features  of  the  law  provide  for  mort- 
gage banks  and  institutions  of  credit  somewhat 
like  trust  companies. 

Discount  rates  are  rather  high,  6  to  8  per  cent, 
being  a  fair  average. 

Following  is  a  statement  of  the  condition 
of  the  banks  in  the  aggregate,  for  1907,  m 
pesos : 


Capital 

Surplus 

Notes 

Bonds 

Demand  Deposits 

Deposits  and  Current  Account 


Total 


i55>25o>ooo 
54,895,000 
99,072,000 
18,450,000 
33,426,000 

348,066,000 

709,159,000 


Of  the  cash  reported  48,600,000  pesos  was  in 
gold.  Silver  is,  however,  also  available  for 
reserves ;  so  that  the  reserve  position  was  quite 
strong. 

In  1897  the  aggregate  resources  were  only 
131,000,000  pesos;  in  1903  the  sum  reached 
381,000,000.  There  has  thus  been  a  very 
marked  increase  in  recent  years. 

There  are  twenty-six  banks  of  issue,  and  six 


Bills  Discounted  198,874,000 

Loans  116,566,000 

Mortgages  22,685,000 

Current  Accounts  264,005,000 

Cash  73.io3'Ooo 

Other  Items  33.926,ooo 

Total  709,159.000 

others  included  in  these  statements;  several  of 
the  smaller  issue  banks  have  since  been  merged. 
The  National  Bank  has  over  300,000,000 
pesos  of  resources,  or  considerably  more  than 
40  per  cent,  of  the  total.  The  capital  has  been 
increased  to  32,000,000  pesos,  and  its  surplus  is 
27,500,000  pesos.  It  has  54  branches  and 
agencies.  Dividends  have  been  16  to  20  per 
cent,  for  a  number  of  years. 


CQ 


g| 

U 

O  Q 
o 

J  i 
o 


Banking  in  Cuba 

BANCO  NACIONAL  DE  CUBA 


(NATIONAL  BA 

Banking  in  Cuba  before  the  American  occu- 
pation was  conducted  principally  by  private 
and  what  are  known  as  merchantbankers,  in  con- 
nection with  their  other  business,  and  there  are 
still  some  very  strong  houses  of  this  character. 
The  only  two  banks  which  publish  state- 
ments of  their  business  in  Cuba  are  the  Bank 
of  Spain  for  the  Island  of  Cuba  and  the  Na- 
tional Bank  of  Cuba.  The  Bank  of  Spain  was 
organized  in  Spanish  times,  and  the  Spanish 
Government  transacted  its  business  through 
it.  Its  nominal  capital  is  58, 000,000  Spanish 
gold,  equivalent,  approximately,  to  $7,200,000 
United  States  currency,  but  it  carries  in  its 
assets  $3,000,000  of  its  own  stock.  The  stock 
is  held  principally  by  Spaniards  and  its  Board 
of  Directors  is  largely  composed  of  the  same 
nationality. 

The  National  Bank  of  Cuba  was  organized 
in  I  go  I.  and  was  the  fiscal  agent  and  deposit- 
ar)'  for  the  United  States  Government,  and 
through  it  all  revenues  were  disbursed  and 
audited  by  means  of  checks  on  the  bank. 

The  Republic  of  Cuba  adopted  the  same  sys- 
tem of  handling  its  moneys  through  this  bank. 
The  paid-up  capital  of  the  National  Bank  of 
Cuba  is  $5,000,000  United  States  currency. 
Its  head  offices  are  in  Havana,  with  fifteen 
branches  throughout  the  Island.  The  stock  of 
this  bank  is  held  principally  in  Cuba,  the 
United  States,  France  and  Great  Britain.  Its 
Board  of  Directors  is  composed  of  Americans, 
Cubans  and  Spaniards.  This  bank  has  com- 
bined the  National  banking  system  of  the 
United  States  with  the  branch  banking  sys- 
tems of  Europe,  and  its  heads  of  departments 
have  been  drawn  from  the  principal  banks  of 
the  world.  Business  and  correspondence  is  con- 
ducted in  Spanish.  English.  French  and  German 
to  meet  the  requirements  of  the  cosmopolitan 
and  international  character  of  its  business. 

The  Bank  of  Havana  and  branches  of  the 
Royal  Bank  of  Canada  and  the  Bank  of  Nova 
Scotia  are  also  doing  business  in  Cuba. 


NK.  OF  CUBA) 

It  has  only  been  since  the  establishment  of 
the  National  Bank  of  Cuba  that  checks  have 
been  used  to  any  extent,  but  they  are  rapidly 
growing  in  favor,  as  indicated  by  the  increase 
in  deposits  shown  by  the  statement  of  this 
bank  from  §4,000,000  in  1902  to  over  S16,- 
000.000  in  1908.  Of  this  §1,500,000  is  in  its 
savings  department.  The  Savings  Bank  was 
a  new  departure,  organized  for  the  first  time 
in  Cuba  by  this  bank. 

The  number  of  checks  paid  over  the  counter 
of  the  head  office  of  the  National  Bank  of  Cuba 
now  reaches  over  3.000  per  day,  and  the  move- 
ment of  actual  cash,  as  distinct  from  checks, 
through  the  tellers,  reaches  more  than  S  1,000. - 
000  per  day,  principally  in  coin,  as  United 
States  bank  notes  are  very  scarce.  Collections 
in  Havana  run  over  Si. 000, 000  per  week. 

As  Cuba's  business  is  international  in  its 
character,  so  is  its  banking.  The  bank  must 
deal  in  the  money  of  every  country  of  the 
world  in  daily  transactions  over  the  counter, 
in  the  purchase  and  sale  through  drafts  and 
cable  transfers  of  povmds  sterling,  francs, 
pesetas,  marks,  liras,  yen,  Chinese  and  Mexi- 
can dollars  and  all  other  currencies. 

These  operations  are  usually  made  against 
Spanish  gold,  as  the  local  payments  are  made 
in  that  money.  Drafts  are  drawn  on  Cuba  in 
Spanish  gold  or  silver  and  United  States  cur- 
rency, and  remitted  in  the  money  of  the  coun- 
try from  which  the  drafts  come,  although  some 
bankers  require  drafts  on  them  payable  '"in 
Spanish  gold  at  the  current  rate."  In  order 
to  make  the  rates,  the  bank  must,  therefore, 
keep  advised  daily  by  telegrams  of  the  situa- 
tion and  markets  of  every  part  of  Cuba,  and 
by  cable,  of  the  principal  money  centers  of 
the  world. 

To  indicate  the  volume  of  foreign  exchange, 
the  turnover  of  the  National  Bank  of  Cuba  in 
the  last  year  amounted  to  §140,000,000, 
which  includes  the  operations  between  bank- 
ers. 


South  America 


Most  of  the  republics  of  South  America  are  pass- 
ing through  a  transition  stage  in  their  monetary 
afifairs.  The  central  bank  plan  is  being  adopted  in 
general,  but  the  completion  of  the  change  will  be 
somewhat  delayed  in  many  of  them.  Banks  con- 
trolled by  foreign  interests  do  a  large  part  of  the 
discounting  business,  having  numerous  branches 
throughout  the  continent ;  some  of  these  for- 
merly had  note-issuing  functions  as  well. 

Argextixa  has  over  500,000,000  pesos  of 
Government  notes,  greatly  depreciated,  but  at  a 
fixed  valuation  of  44  per  cent.  At  par  the  peso 
is  96.5  cts.  Considerable  progress  is  being  made 
toward  the  rehabilitation  of  the  currency,  the 
Government  having  a  gold  fund  of  nearly  130,- 
000,000  pesos,  and  the  National  Bank  is  being 
utilized  to  assist.  Its  capital  of  50,000,000 
pesos  paper,  is  being  increased  to  90,000,000 
pesos ;  it  will  be  the  central  organ  of  the  system, 
which  includes  a  number  of  large  foreign-con- 
trolled institutions.  Accounts  are  kept  in  gold 
and  in  paper  money;  thus  the  aggregate  re- 
sources of  the  banks  were,  at  the  end  of  1907, 
approximately  500,000,000  pesos  paper  and 
200,000,000  gold ;  of  this  the  National  had  280,- 
000,000  pesos  paper  and  30,000,000  gold ;  its 
cash  holdings  were  55,000,000  pesos  paper  and 
18,500,000  gold.  Discount  rates  were  7  per  cent. 

BoLiN'iA  uses  bank  notes;  four  banks  had  the 
issue  right  and  kept  their  notes  at  par  in  silver 
by  adequate  reserves.  In  1906  the  gold  stand- 
ard was  decreed,  and  the  National  Bank  is 
gradually  becoming  the  sole  note-issuing  bank. 
It  has  5,000,000  bolivianos  of  capital  (the  unit 
is  48.7  cts.),  and  its  resources  foot  up  over  20,- 
000,000.  Notes  out  were  about  6,500,000 
bolivianos  and  cash  4,500,000.  Other  banks' 
notes  to  the  amount  of  about  3,500,000  bolivi- 
anos are  still  in  use;  their  resources  are  about 
13,000,000  bolivianos.  Foreign  banks  do  con- 
siderable business. 

Brazil,  with  about  700,000,000  milreis  of 
Government  currency,  is  planning  rehabilitation 
upon  lines  similar  to  those  adopted  in  Argentina. 
The  paper  stands  at  about  56  per  cent. ;  at  par 
the  milreis  is  54.6  cts.     The  Bank  of  Brazil  is  to 


have  its  capital  increased  from  45,000,000 
milreis  to  70,000,000,  which  will  bring  its  re- 
sources up  to  125,000,000  milreis.  The  Govern- 
ment takes  part  of  the  capital.  Foreign  banks 
do  a  large  business,  their  resources  being  fully 
equal  to  those  locally  chartered,  say  320,000,000 
milreis  for  each  class. 
^  Chile  has  150,000,000  pesos  of  Government 
notes  depreciated  to  about  44  per  cent,  (here 
the  peso  at  par  is  only  35.6  cts.).  A  gold  fund 
is  being  established  to  bring  notes  to  parity. 
Banking  capital  is  reported  at  80,000,000  pesos, 
resources  about  350,000,000.  The  Bank  0} 
Chile  is  the  central  organ,  with  30,000,000  pesos 
capital,  15,000,000  surplus  and  150,000,000  of 
resources.  It  reports  cash,  chiefly  Government 
notes,  at  16,500,000  pesos.  Foreign  banks  do 
a  good  share  of  the  business. 

Colombia  has  for  some  time  past  had  the  most 
depreciated  Government  currency  of  recent 
times;  it  is  still  rated  at  100  for  i  of  gold.  A 
central  bank  with  a  capital  of  8,000.000  pesos 
gold  has  been  organized  to  aid  in  rehabilitation. 
It  is  privately  owned,  and  may  issue  notes  to 
twice  the  amount  of  its  capital,  provided  it  has 
30  per  cent,  gold  in  reserve.  The  new  peso  is 
equal  to  one  dollar  U.  S.  Corporate  banks 
are  not  numerous,  the  greater  part  of  the  busi- 
ness being  done  by  private  bankers,  largely 
foreigners.  One  bank  reports  capital  600,000 
pesos  gold,  all  resources  1,140,000  pesos  gold 
and  55,900,000  of  paper;  this  gives  it  about 
6,800,000  pesos  at  gold  values. 

Ecuador  has  bank  notes  which  stand  at  par. 
Two  banks  issue  them  to  the  amount  of  9,500,- 
ooosucres  (equal  to  48.7  cts.),  upon  a  50  percent, 
gold  reserve.  The  reports  show  capital  of  the 
banks  7,600,000  sucres,  resources  33,000,000, 
including  6,200,000  sucres  of  coin.  There  are 
several  agencies  of  foreign  banks  in  the  country. 

Paraguay  has  also  depreciated  paper  money, 
about  35,000,000  pesos  (the  peso  at  par  is  96.5 
cts.).  A  central  bank  was  authorized  in  1905. 
and  it  is  laboring  to  correct  the  currency  evil, 
by  accumulating  some  6,000,000  pesos  in  gold 
to  that  end.     The  gold  premium  was  at  one  time 


fully   i,ooo   per  cent.     Foreigners  control   the 
banking  almost  entirely. 

'  Peru  had  such  disastrous  experiencesjwith 
depreciated  paper  that  the  use  of  notes  was 
totally  abolished  by  law.  Discount  banking  is 
largely  in  foreign  hands.  The  local  reporting 
banks  show  capital  ^600,000,  resources  ;^5,8oo,- 
000.  The  Peruvian  pound  is  the  same  as  the 
British,  $4.86|. 

Uruguay  has  superseded  the  system  under 
which  three  banks  (two  foreign)  issued  notes, 
by  limiting  the  power  to  its  chief  institution. 
The  capital  of  the  Bank  of  the  Repuhlic  is  owned 
chiefly  by  the  Government  and  it  has  nearly 
11,000,000  pesos  of  notes  out.  (Here  the  peso 
is  $1,034).  Against  the  notes  it  has  over  9,000,-" 
000  pesos  of  coin ;  part  of  the  notes  (about  one- 
fourth)  are  payable  in  silver.  The  total  re- 
sources of  the  Bank  are  about  23,000,000  pesos. 
Foreign  banks  do  a  very  large  part  of  the  busi- 
ness, having  resources  greater  than  those  of  the 
central  bank  in  the  aggregate. 

Venezuela  has  also  bank  notes  maintained 
at  par.  Three  banks  of  issue  capitalized  at  19,- 
250,000  bolivars  (equal  to  19.3  cts.)  show  4,200,- 
000  of  notes  out  and  the  same  amount  of  coin  in 
hand.  Their  resources  aggregate  about  72,000,- 
000  bolivars.  The  Bank  oj  Venezuela  is  the 
central  organ;  its  capital  is  12,000,000  bolivars; 
resources  45,000,000. 


CENTRAL  AMERICA 

Costa  Rica  has  the  best  system  among  these 
small  republics.  With  the  gold  standard,  the 
unit  the  colon  of  46.5  cts.,  it  has  bank-notes 
maintained  at  par,  issued  by  three  banks ;  the 
amount  is  limited  to  twice  the  coin  on  hand. 
Capitalized  at  4,500,000  colones,  their  re- 
sources aggregate  17,  000,000.  Coin  holdings 
are  about  2,600,000  colones  and  notes  out 
4,200,000. 

Salvador  has  the  silver  standard,  the  peso 
fluctuating  about  46.5  cts.  It  uses  bank-notes, 
of  which  about  4,000,000  pesos  are  in  use, 
backed   by  about    1,600,000  of  coin   (silver). 


Bank    resources    total   about    12,000,000    pe- 
sos. 

Honduras  uses  about  500,000  pesos  (silver) 
of  bank-notes  fairly  covered ;  bank  assets  are 
about  2,500,000  pesos. 

Nicaragua  shows  about  7,000,000  pesos 
(nominal)  of  bank-notes  out,  but  very  in- 
adequate reserves;  hence  the  notes  are  badly 
depreciated,  the  premium  on  gold  ranging 
about  500  per  cent. 

Guatemala  has  in  addition  to  about  48,000,- 
000  pesos  of  bank  issues,  a  Government  cur- 
rency of  6,000,000  pesos;  coin  in  banks  is  re- 
ported at  less  than  4,000,000  pesos,  hence 
gold  is  often  quoted  as  high  as  1,000  per 
cent. 

Panama  has  several  small  banks,  but  no 
note-issues. 

WEST  INDIES 

The  islands  of  the  western  continent  have 
the  systems  of  money  and  banking  of  the  coun- 
tries to  which  they  belong. 

Jamaica  and  the  other  British  possessions, 
including  Guiana,  are  served  largely  by  the 
Colonial  Bank,  established  1836,  with  a  capital 
of  ;^6oo,ooo  and  a  25  per  cent,  surplus.  It  has 
usually  about  ;^5oo,ooo  of  notes  in  use  and 
carries  ;^40o,ooo  of  specie  in  its  ;^3, 500,000  of 
resources;  deposits  are  at  times  nearly  ;^2,ooo,- 
000,  and  it  has  over  ;^5oo,ooo  in  bills  payable. 
There  are   a   few  minor  banks   in   these    col- 


Guadeloupe  and  Martinique  each  has  a 
bank  of  issue  modeled  on  the  French  system, 
each  with  capital  of  3,000,000  francs;  their  com- 
bined note-issues  are  nearly  13,000,000  francs, 
and  total  resources  about  31,000,000,  including 
4,500,000  coin. 

Haiti  has  a  central  bank,  owned  by  for- 
eigners, but  the  arbitrary  Government  has  des- 
troyed its  utility.  Depreciated  Government 
currency  circulates  exclusively;  gold  is  at  400 
per  cent,  premium. 


The  Two  United  States  Banks 


The  first  United  States  Bank  was  organized 
in  1 791,  by  an  act  of  Congress  drawn  by  Alexan- 
der Hamilton,  the  first  and  greatest  of  the 
Secretaries  of  the  Treasury;  the  charter  of  the 
second  Bank,  granted  in  181 6,  was  largely  de- 
signed upon  the  same  lines,  modified  in  some 
particulars  by  Albert  Gallatin,  easily  the 
second  in  capacity  of  our  long  list  of  finance 
ministers. 

In  both  cases  the  charters  were  for  twenty 
years,  and  were  exclusive  so  far  as  the  federal 
legislature  could  make  them  so.  Under  our 
composite  system  of  government  it  was  then  held 
that  the  States  had  the  unquestionable  right  to 
authorize  banks  with  note-issuing  powers. 
This  view,  indeed,  was  the  cause  of  most  of  the 
currency  troubles  of  the  country  for  over  seventy 
years. 

In  designing  the  central  banks  both  Hamilton 
and  Gallatin  had  in  mind  the  regulation  of  the 
issues  of  the  State  banks  and  not  their  extinction. 
Jefferson  and  his  political  adherents,  with  the 
exception  of  those  who  were  under  the  influence 
of  Gallatin,  opposed  the  creation  of  both 
banks,  regarding  the  action  unconstitutional; 
but  Hamilton's  views  prevailed  with  President 
Washington  in  1791,  and  the  force  of  circum- 
stances caused  President  IMadison  in  1816  to 
reject  Jefferson's  advice. 

The  first  Bank  was  capitalized  at  $10,000,000, 
of  which  the  Government  took  one-fifth,  bor- 
rowing the  money  to  pay  therefor  from  the  Bank, 
upon  bonds.  The  twenty-five  directors  were 
chosen  by  the  shareholders,  whose  voting  power 
was  regulated  so  that  no  single  shareholder 
might  have  more  than  thirty  votes,  irrespective 
of  the  number  of  shares  owned.  The  Bank  was 
prohibited  from  dealing  in  anything  but  ex- 
change and  bullion,  but  it  might  sell  the  bonds 
received  on  account  of  its  capital.  (In  order  to 
help  the  Treasury  to  float  a  loan,  it  had  been 
provided  that  the  major  part  of  the  capital  was 
to  be  paid  up  in  Government  bonds.)  Treasury 
inspection  was  also  provided  for. 

The  right  to  issue  notes  was  evidentlv  con- 


sidered as  one  inherent  in  any  bank,  for  no 
specific  authority  was  given  in  the  charter ; 
there  was,  however,  a  proviso  that  the  debts  of 
the  Bank  on  account  of  notes  and  other  items 
except  deposits  were  not  to  exceed  the  capital. 
Thus  the  limit  of  issue  was  under  $10,000,000. 
So  long  as  the  notes  were  redeemable  in  coin 
they  were  to  be  received  for  federal  taxes.  Dis- 
count rates  were  limited  to  6  per  cent,  by  the 
charter ;  but  this  restriction  was  subsequently  re- 
moved by  another  act. 

No  complete  reports  of  the  condition  of  the 
Bank  are  available,  although  the  Treasury  was 
empowered  to  require  them  and  probably  did 
so.  From  partial  reports  it  appears  that  there 
were  about  $6,000,000  in  deposits  and  $5,000,- 
000  in  notes;  loans  reached  $15,000,000,  and 
coin  held  $5,000,000.  The  head  office  was  in 
Philadelphia,  and  branches  existed  in  New  York, 
Baltimore,  Washington,  Norfolk,  Charleston, 
Savannah  and  New  Orleans.  The  Bank  was 
prosperous,  paying  more  than  8  per  cent, 
average  dividends ;  the  Government  sold  its 
shares  by  1802,  realizing  a  net  profit  of  nearly 
57  per  cent,  on  the  investment,  allowing  for 
interest  on  its  bonds  issued  to  buy  the  shares. 

When,  before  181 1,  the  Bank's  charter  was 
about  to  expire.  Congress  renewed  it,  but 
Madison,  despite  Gallatin's  arguments,  vetoed 
the  bill.  Immediately  upon  the  expiration  of 
the  Bank,  the  State  banks  in  most  of  the  sec- 
tions, no  longer  under  restraint,  proceeded  to 
inflate  their  note-issues,  and  an  era  of  badly 
depreciated  currency  followed,  which  rendered 
the  financing  of  the  War  of  181 2  vastly  more 
difficult.  It  was  one  of  the  most  discouraging 
experiences  the  nation  has  had ;  the  disasters 
were  relatively  greater  than  in  later  crises,  be- 
cause the  country  was  young  and  not  wealthy. 

By  18 1 6  Madison  changed  his  views  and  ap- 
proved an  act  of  Congress  for  the  creation  of  the 
second  Bank.  Its  capital  was  $35,000,000;  the 
Government  again  took  one-fifth,  paying  there- 
for by  borrowing;  but  it  reserved  the  power  of 
appointing  (by  the  President)  one-fifth  of  the 


twenty-five  directors.  The  voting  of  shares  was 
regulated  as  in  the  case  of  the  first  Bank,  foreign 
holders  having  no  votes;  the  business  and  the 
note-issuing  powers  were  also  similarly  regu- 
lated, and  the  discount  rate  was  limited  to 
6  per  cent.  Notes  under  S5  were  prohibited, 
and  suspension  of  payments  of  notes  or 
deposits  was  punishable  by  a  penalty  of 
12  per  cent,  per  annum  upon  the  sums  in- 
volved. 

^  The  Bank  was  authorized  to  establish 
branches  where  it  pleased,  provided  there  was  at 
least  one  in  every  State  where  2,000  shares  of  its 
stock  were  held.  In  fact  there  were  five  in  Xew 
England,  three  in  the  Middle  States,  ten  in 
Southern  and  five  in  Western  States,  after  1820; 
the  head  office  was  in  Philadelphia.  The 
Government  moneys  were  to  be  deposited  in  the 
Bank  or  branches,  unless  otherwise  directed  by 
the  Secretary  of  the  Treasury,  who  was,  how- 
ever, required  to  report  to  Congress  the  reasons 
for  any  changes. 

The  Bank  paid  the  Government  81,500,000 
for  the  charter  and  was  to  do  the  Government's 
business  without  charge. 

The  chaotic  monetary  conditions  retarded 
the  opening  of  the  Bank  until  181 7,  and  in 
conjunction  with  bad  management  delayed  its 
efficient  operation  until  after  1819.  The  con- 
stitutionality of  the  charter  was  attacked  in  the 
highest  court,  but  this  question  was  determined 
favorably  to  the  institution.  After  these  diffi- 
culties had  been  overcome,  the  Bank  became 
prosperous  and  highly  eflicient,  at  one  time 
rivaling  the  similar  central  institutions  of 
England  and  France  in  international  im- 
portance. 

It  was,  however,  at  home  that  its  greatest  use- 
fulness was  shown;  it  not  only  regulated  the 
paper  currency  in  an  admirable  manner,  but 
the  foreign  and  domestic  exchanges  and  the 
discount  rates  as  well.  It  may  be  said  that 
never  in  the  country's  history  have  the  people 
had  a  sounder  currency  or  more  nearly  stable 
money  and  domestic  exchange  rates,  than 
during  the  best  period  of  the  Bank's  life. 
The  writings  of  Gallatin  as  well  as  nu- 
merous   executive    and    legislative     reports   of 


the  Government  bear  testimony  of  these  facts. 
Since  its  notes  alone  of  all  the  paper  cur- 
rency were  receivable  for  ta.xes  and  dues  to  the 
federal  Government,  it  was  able  to  induce  most 
of  the  State  banks  to  keep  their  currency  sound 
by  accepting  their  notes  for  the  payments  to  the 
Government  so  long  as  proper  reserves  were  held 
and  redemption  in  specie  thus  provided  for. 
But  it  refused  to  do  this  for  State  banks  mani- 
festing a  disregard  for  ordinary  honest  principles 
of  banking,  thus  gradually  weeding  out  the 
vicious  elements,  whose  worthless  notes  had 
been  foisted  upon  the  people  during  the  era  of 
inflation. 

It  made  special  efl'orts  to  furnish  currency  and 
facilities  to  the  sections  where  capital  was  scarce 
and  banking  means  hence  deficient ;  thus  its 
business  in  New  England,  where  banks  were 
numerous,  was  always  far  less  than  that  in  its 
Southern  branches.  By  far  the  larger  part  of  its 
notes  were  issued  in  the  Southern  and  Western 
States ;  and  relatively  speaking,  it  is  a  question 
whether  at  any  time  since  (even  to-day)  those 
sections,  always  showing  a  need  for  greater 
facilities,  were  as  well  and  as  cheaply  served  as 
they  were  by  the  great  Bank. 

But  the  restraints  imposed  by  the  Bank  be- 
came irksome  to  many  who  were  averse  to  con- 
servative banking;  this  feeling  was  assiduously 
cultivated  among  the  people,  particularly  among 
those  less  prosperous;  and  presently  it  became 
a  political  issue,  fathered  by  President  Jackson, 
that  the  Bank  was  scourging  the  people.  Con- 
gress in  vain  endeavored  to  correct  this  gross 
error;  Jackson  vetoed  the  bill  to  renew  the 
charter  of  the  Bank,  July  10,  1832,  and  was 
victorious  in  the  contest  before  the  people  in 
that  year.  Thus  nearly  four  years  before  the 
charter  expired,  the  Bank  was  doomed,  as  its 
predecessor  had  been,  to  be  destroyed  through 
political  fatuity.  As  early  as  1833  the  Govern- 
ment deposits  began  to  be  placed  in  the  State 
banks. 

That  there  was  some  ground  for  criticism  of 
the  Bank's  ccmstitution  and  management  may 
be  conceded ;  yet  none  of  these  defects  were  such 
as  could  not  have  been  adequately  remedied  by 
intelligent  legislation.     But  instead  of  corrective 


regulation,  destruction  had  been  determined 
upon  by  tlie  Jacksonians ;  thus  the  nation  was 
wantonly  deprived  of  the  very  best  currency 
and  banking  system  it  ever  had.  The  inevita- 
ble result  followed:  State  banks,  free  from  re- 
straint, proceeded,  with  relatively  few  excep- 
tions, to  inflate  note-issues  enormously,  in  many 
cases  absolutely  without  reserve.  The  cur- 
rency soon  depreciated  and  the  expansion 
reached  the  bursting  stage  in  1837,  when  the 
country  experienced  the  worst  financial  crisis  in 
its  history. 

In  1840  the  people  reversed  Jackson,  choosing 
Harrison  and  Tyler  in  the  campaign  that  year, 


Capital 

Deposits 

Circulation 

Due  to  Home  Banks 

Due  Foreign  Banks 

Other  Items 

Total 


$35,000,000 

12,300,000 

10,700,000 

700,000 

800,000 

4,000,000 

$63,500,000 


with  the  Bank  question  as  an  issue ;  but  President 
Harrison  died  before  Congress  could  legislate, 
and  his  successor,  Tyler,  recreant  to  the  pledges, 
vetoed  repeated  bills  to  create  another  United 
States  Bank.  It  is  an  interesting  commentary 
upon  our  political  inertia  as  a  nation,  that  the 
specters  raised  by  Jackson  have  prevented  the 
adoption  of  this,  the  only  practical  comprehen- 
sive solution  of  our  currency  evils,  as  evidenced 
by  the  experience  of  other  people. 

Reports  of  the  second  Bank  were  made 
periodically ;  from  these  a  statement  of  its  aver- 
age annual  condition  for  the  entire  period  of  its 
life  has  been  prepared,  and  is  here  presented: 


Loans 

Securities 

Specie 

Notes  of  Other  Banks 

Due  from  Other  Banks 

Due  from  Foreign  Banks 

Other  Items 


$39,100,000 
9,100,000 
6,500,000 
1,400,000 
2,400,000 
900,000 
4,100,000 


Loans  stood  highest  for  the  end  of  any  one 
year,  at  $66,293,000  in  1832,  deposits  at  $22,- 
761,000  in  the  same  year,  circulation  $23,000,000 
in  1836,  specie  at  $15,700,000  in  1835. 


The  charter  expired  in  March,  1836;  it  con- 
tinued, as  a  State  bank,  under  Pennsylvania 
charter,  until  1840,  when  the  losses  due  to  the 
panic  compelled  liquidation. 


Courtesy  of  the  Girard  National  Bank  of  Philadelphia 

THE     BANK     OF    THE    UNITED     STATES    IN     I795 
PHILADELPHIA 

r.iiilding  now  occupied  by  the  Girard  National  Bank 


N.  W.  HALSEY  &  CO. 

Bankers  and  Dealers  in  Bonds 
NVITE  attention  to  the  superior  facilities  afforded  for  the 


I 


purchase  and  sale  of  high  grade  Investment  Bonds  and 
Notes  in  the  various  securities  markets. 

With  an  experienced  organization  and  the  best  of 
financial,  legal  and  engineering  connections,  the  firm's  recom- 
mendations are  based  on  expert  analysis  of  dependable 
information. 

Detailed  lists  of  Municipal,  Railroad  and  Public  Utility 
Bonds  furnished  upon  application.  *  Deposits  of  surplus 
funds  received  subject  to  liberal  interest  allowance.  *  Invest- 
ment business  of  Banks,  Trustees  and  Individuals  solicited. 

Personal  Interviews  and  Correspondence  Invited 

On  request,  pamphlet,  "  Bonds  as  a  Secondary  Reserve  for  Banks  " 


49  WALL  ST.,  NEW  YORK 

PHILADELPHIA  CHICAGO  SAN  FRANCISCO 

Boston  Correspondent,  MERRILL,  OLDHAM  &  CO. 


^A 


Banking  House  of  Knauth,   Nachod  &  Kuhne,   Leipzig,  Germany 


THE  Banking  House  of  Knauth,  Nachod  &  Kuhne, 
New  York  and  Leipzig,  was  founded  in  1 852.  ^  They  were  the  pioneers 
in  educating  the  inland  banks  of  the  United  States  to  do  a  Foreign  Exchange 
business.  C|  They  make  a  specialty  in  providing  funds  for  travelers ;  their  letters 
of  Credit  being  among  the  best  known  in  the  world,  and  their  Travelers'  cheques 
are  the  most  convenient  form  of  procuoiig  feady  funds  for  the  traveler  that  can  be 
secured.  ^  They  make  arrangements  with  Banks  and  Bankers,  enabling  them  to 
draw  their  own  drafts  direct  on  more  than  one  thousand  cities  in  Europe  and  the 
Orient.  ^  They  have  a  thoroughly  organized  department  for  the  sale  of  investment 
securities,  and  execute  orders  on  the  New  York  Stock  Exchange.  ^  They  receive 
deposit  accounts,  subject  to  check,  on  favorable  terms  and  invite  correspondence. 

Members  of  the  New  York  Stock  Exchange. 


^HIS  BOOK  IS  BUE  o^  thI.  r 

STAMPED  BEj^ow^'^^E 
;AN  INITIAL  P^^nr. 

°AV    AND    TO    sr°^°^^'^TSONrHV^^^^^^ 


io 


^^  21-ioo„,.7 


,33 


YE  02665 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


1 

^^^^^^^^^^^^^^^Hh' 

